Making Games for Profit: The Reality of the Video Game Industry

1. Making Games for Profit: The Reality of the Video Game Industry By Matt Gilgenbach Programmer Heavy Iron Studios

2. About Myself • Graduated from the University of Michigan in 2003 • Interned at Microsoft on the Xbox Software Services Team during the summer of 2003 • Worked on the Xbox Media Center Extender • Hired as an associate programmer at Heavy Iron Studios in the Fall of 2003 • Promoted to a staff programmer in July 2004 • Shipped my first game, “The Incredibles”, in September 2004

3. About Heavy Iron Studios • Owned by THQ • Had two teams using shared technology built around Renderware • Developed “Spongebob Squarepants: The Movie: The Game” simultaneously with “The Incredibles” • Has only done licensed games

4. Roles in the Video Game Industry • Art • Character models • Level art (sometimes they may do level design?) • Prototype effects for programming • Animation • They do animation for the game characters • FMVs • cut scenes

5. Roles in the Video Game Industry (continued) • Programming • All the code for the game • developer tools • Design editor • Art/animation utilities • Production • Scheduling, dealing other companies, corporate HQ, licensors, etc • At some companies, the producer is the “visionary” for the game • Other companies have director who is the “visionary” • Design • Varying responsibilities from company to company • Some companies, they make all the specs for the entire game, others they just do the level building

6. Roles in the Video Game Industry (continued) • Audio • Usually contracted out, but sometimes in house • Helpful if the person can program • Test • Publishers have staff • Studios may have a few testers on the team • Mostly, they are hired, then fired

7. A Role You Didn’t Expect To See • Marketing • They market the game (obviously) • Has some influence on what features your game should have • Don’t care about game play, just what they can write on the box • For a more cynical look at them, see Jason Rubin’s speech at the DICE summit

8. Programmer Roles • Junior • Doing builds • Tools programming • Level creation tool for design • Some companies have it as a Maya plug-in • Art file conversion and utilities • Technical requirements for consoles • Localization

9. Programmer Roles • Mid-level • Enemy AI • Various widgets • Player characters • Some effects work

10. Programmer Roles • Senior • Graphics • Optimization • Low-level stuff • Code that runs on the Playstation 2 co-processors • Memory manager • Fun and exciting technology

11. What I Do Every Day • Sit in front of a computer • Program • That’s pretty much it

12. What I Do Every Day in Depth • Beginning of the project • Tools • Systems – AI, one-liners, sound, text • Prototypes • Middle of the project • Gameplay – AI, player control, widgets, collision • Work with designers and animation • Effects • Work with artists • End of the project • Memory/speed optimizations • Bugs – not just yours

13. The Video Game Industry • Making video games is an INDUSTRY • Definition of Industry: (from www.dictionary.com) • Commercial production and sale of goods. • A specific branch of manufacture and trade: the textile industry. See Synonyms at business • Business and Commerce is all about the bottom line. $$$$$$ • Publishers have to answer to shareholders

14. The Repercussions of Business • Games are made to make money • If games aren’t a commercial success, then they are a failure, regardless of how fun or good they are • Exceptions: If it’s good for the company • If it’s first party published, sells console • Changes the view of the company for the better • THQ: We’re not just a kid’s publisher anymore

15. The Punisher

18. Current State of Games • Good games sometimes don’t sell • Bad games sometimes do • Two reasons that games sell • Marketing • Brands

19. Branding: Licensed Games vs. IP • Licensed games • Guaranteed sales regardless of quality • Good branding • Exploits marketing hype • “The Incredibles” has a huge marketing push that we leverage • IP (Intellectual Property) • Publishers like it if they can make a brand • When you have good IP, it’ll still sell like a license, but you don’t have to pay the licensor • Coming up with new IP is risky • When you have good IP, making a sequel is not

20. Finding Nemo • Sold a whole lot!

21. Publishers • They control the money, so they control the industry • They pay for the games • They get the games in stores • They market the game • Some studios (Valve) are trying to cut the publisher out of the picture • Online distribution • Unlikely that this will ever be a way to distribute a commercially successful large budget game • Casual gamers are the biggest market • Walmart is the biggest video game retailer

22. Working With Publishers • Independently Owned • The publisher gives you milestone payments, and if there is bad budgeting by your manager, you won’t get paid • Pretty much never see royalties, unless you are a company that only makes huge hits • For example, id software • They got a dream contract from Activition • Usually royalties for independent studios work as follows • A small percentage of the revenue of your game counts towards royalties for your company • You have to pay back the cost of the development OUT OF YOUR ROYALTIES before you get any more money

23. Working With Publishers • Owned by the publisher • The publisher pays your salary and all the bills • Studio management has to budget • The publisher can call all the shots since they own you • Could get paid royalties or not • At the discretion of the publisher, but usually more generous than to external developers

24. Pros and Cons • Independently Owned • More freedom • Create a game idea and shop it around • Get a job from a publisher if you want • More risk • Project may get cancelled • Publisher may dump it, so you have shop around again • May be difficult to find new projects • Layoffs between projects • Owned by the Publisher • Less freedom • Publisher calls the shots • Less Risk • You get the same salary even if there’s not much going on

25. Future of Publishers • Independently owned studios • Getting increasingly difficult to start up • Cost of games • Publishers trust the studios they own more • Publishers are buying up more and more studios • THQ acquired Relic earlier this year • EA bought Criterion (and Renderware) • Publishers get more control • They like since games are a big financial risk • Owning the studios means they can share • Technology • People

26. Technology Sharing • The cost of games is rapidly rising • Development times are growing • Middleware/shared technology help solve both of these problems • The downside is your game won’t be as good from a performance standpoint • General purpose solutions aren’t the best ones for performance • Worse performance means worse graphics, less enemies, etc

27. Technology Sharing with Middleware • Sold middleware • Renderware, Gamebryo, Symbionic, etc • Internal middleware • Before EA bought Renderware, they used EAGL – Electronic Arts Graphics Library • Sometimes a studio will work on many games with the same engine and tools

28. The Future of Game Development • Development teams will be larger • As the technology gets better, it can run more code per second, so you need more code • This is why middleware helps • Higher polygon count and higher res textures require more artists to create • More memory means more animations • Larger teams need more management • All these people mean development costs will continue to increase

29. John Carmack says: • John Carmack discussed the next 5 years of game development at his GDC keynote • I asked him the question, “Do you think that there’s a ceiling for the development cost of a game?” • He said, “No, I could easily see games costing $100 million in 5 years.”

30. Repercussions of Even MORE Expensive Games • Even less room for error • A game that costs $100 million better make close to that back in profit, or the publisher is really hurting • Even less room for new ideas than currently • No publisher is going to sign away $100 million on something that isn’t guaranteed to sell • Even less creativity than the movie industry • Games need to be a blockbuster hit because they will all cost a lot • Independents will play a much smaller role • With Digital Camcorders, anyone with talent can make a film of similar quality to the big budget Hollywood productions • Not the same with video games

31. So, Is Creativity Dead? • Hopefully not • Just much more difficult • Creative, innovative titles can be the most profitable • The Sims • definitely creative • EXTREMELY popular • Once a creative, innovative title is made, you can expect • lots of sequels • knock-offs

32. If It’s So Bad, Why Don’t You Get Another Job? • I really like my job • I like working in the video games • I’m just trying to say what it’s like, not that it is horrible

33. Your Options • Work for a company that makes great games • This is hard because everyone wants to • Pros • You work on something you can be proud of • Millions of people will enjoy your work • Cons • You’ll have much less responsibility because there will be experts there • This is good if you just want to make a great game

34. Your Options • Work for a company that doesn’t make great games • Pros • You get more responsibility because there are less experts there • You can move up faster because there are more people coming and going • Cons • You slave away long hours for something you might not really like • You can’t learn how great games are made • This is good if you really love the work because you get to do more interesting stuff

35. Your Options • Stay in academia • Academic communities are becoming more interested in research involving video games • EA Game Innovation Lab at USC • Pros • You don’t have to worry about marketing and being a commercial success • You get more freedoms because the proposals are usually pretty open ended • You don’t have the long hours • Cons • Millions of people won’t get to enjoy the work that you do • But your research could be enjoyed by millions of people if someone learns from it

36. Your Options • Work in a different area of software development • Just because you are passionate about video games does not mean video game development is the right field for you • Although if you aren’t passionate about them, then it’s definitely not the right field for you • Pros • Better pay • Better hours • Cons • Probably not as fun or interesting • Not as much room for creativity

37. Conclusion • If you want to go into games, it’s important to know what it’s like • Many people have false impressions going into it and leave very bitter • Although we want to make fun games, the main focus of the industry is to make money • Publishers don’t like taking risks involving large sums of money • Working on games is a lot of fun • Just different from what you may expect