From Revolution to Evolution: GDC Insiders On the Changing Game Industry

Updated Wed, Sep 26, 2012 by Shayalyn

There’s no doubt that the gaming industry is in transition, and things are changing at a breakneck pace. As the GDC Online conference in Austin, Texas approaches (October 9-10), I sat down with three industry experts and GDC Online advisory board members: Eugene Evans, former GM of BioWare Mythic, an EA studio; Valerie Massey, director of community development at the community analytics company CLARA (and former director of communication and public relations for CCP games); and Gordon Walton, VP and Executive Producer at Playdom Austin (formerly VP and co-Studio General Manager at BioWare Austin working on Star Wars: The Old Republic). They shared their industry experience and knowledge about the transitioning online gaming industry. Are we heading for a painful revolution as payment models change and studios announce layoffs more frequently than ever, or is this all part of the evolution of an ever-changing industry, leading us to newer and better things? Read on for our insider’s takes on the current hot topics.

What trends have you spotted in the industry lately? Are they having a positive or negative impact?

Valerie: From my perspective, and I’m not a game developer, it seems to me like there’s a disconnect between what the financial expectations are for a product and what it can deliver. Everybody sees the incredible success that Blizzard had with World of Warcraft, and they want to recreate that. They build these humongous teams, and expect this huge return on investment that’s just impossible.

Valerie Massey

It’s not unusual for a game studio to step up just before a big launch, when you have your final crunch, and add more people than they need to run the live game. But to see the numbers of studios that are doing significant layoffs or shutting down seems to me that’s happening more often than ever. From my perspective, it seems like it goes back to having unrealistic expectations as to what these games should bring in. The amount of money it takes to create them just doesn’t justify how much you’re going to make. And people aren’t content to just make a nice profit that’s enough to sustain a studio anymore.

Eugene: I would agree with what you’re saying, yet take a slightly different point of view. I think that what we’re seeing is a very disruptive and uncertain time where people are trying to figure out what sort of product to deliver, how to deliver it to players, and how they should pay for it. In a lot of cases, if you’re not talking big, if you’re not saying, “Hey, we’re going to reach for the brass ring!” it’s hard to get funding, either internally or externally.

we’re in a time of great disruption, a lot of change, but at the same time there are a lot of opportunities.
- Eugene Evans

I think what’s most interesting about the space right now is that we do see an incredible range of products on the market that are appealing to gamers, scratching an itch they’ve always had, and they range from mobile games to Facebook games to downloadable free-to-play client games all the way up to attempts to make the next big MMO.

I think what was just said is absolutely right about the level of uncertainty and the number of companies that are looking at what has been successful and going, “I want one of those.” That very rarely works because that game--whatever it was, whether it was WoW, League of Legends or Angry Birds--caught people at a particular time and appealed to them in a particular way and then they changed. Great games change people’s world view. They give them something new, interesting, innovative, and it shapes the space making it that much more difficult [for other games] to follow it up. There’s always room for something innovative or new, whether it’s a different type of offering on a different platform or with a different payment model...there’s always room for that, and that’s what wins. Even if it’s something that’s been done before but it’s executed incredibly well. There was no real innovation in WoW, but otherwise it was a very well executed MMO. League of Legends followed a number of games in a similar vein, but it was executed very well.

So, we’re in a time of great disruption, a lot of change, but at the same time there are a lot of opportunities. And that’s kind of been reflected in the evolution of GDC--what was GDC Austin and is now GDC Online--in the last 10 years. It’s gone from being very PC and MMO-focused in the first year, as I recall, to being increasingly diversified in terms of the platforms, and the type of people who attend. And I think the organizers have done a great job of letting the event evolve. I’m very positive about it, and I see this as an amazing period of creativity and innovation.

Valerie: It’s the whole evolve or die thing, right? I mean, the subscription model is going away and if you don’t evolve you’re toast. We see that every day, too.

What Val was just talking about dovetails into my next question. We’re hearing a lot about the death of the subscription model lately. Are we going to see another big subscription-based game?

Eugene Evans

Eugene: One thing I’ve learned in this business is never say never. If something came up with the right offer and the right type of game and the right sort of compelling experience, then I think people would be willing to subscribe to it. I will never write off a business model as done.

But the free-to-play model is very attractive, if done right, to both consumers and developers. For the consumer, they get to play the game and then decide whether they’re going to spend their money or move on to the next. For developers, it’s a great model if they can succeed because people are willing to come try their games.

Valerie: I agree. When people talk about the free-to-play thing, the first thing I think about is Dexys Midnight Runners. I love the song “Come on Eileen,” but I would never buy that whole album. But, because I have access to iTunes and I can buy just that one song, instead of going to the record store to buy one record where I know I won’t like half the songs on it, I go to iTunes and find myself buying 20 songs at a time. So, it all comes down to “Come on Eileen” for me.

Eugene: And in a way, when that first started to happen, it’s not dissimilar today to consumers, and more importantly developers, saying, “Hey, there’s something impure about that payment model.” When they started to sell tracks individually there were a lot of bands that were offended by it and thought it took away from the purity of them creating an album experience, a complete story, a complete theme, something the producers spent a lot of time putting together. And it’s not dissimilar to game designers today deciding that they don’t like what’s happening with free-to-play.

Valerie: At first you think that not having a subscription, being free-to-play, somehow means that the game is inferior. But giving consumers a chance to select what they want to pay for empowers them, and actually makes them more generous with their disposable income. I’m amazed when I hear about some of the money being made from free-to-play games, because people are willing to pay for how they want to play. My daughter was all excited because she bought some kind of sparkly horse in WoW--I haven’t played that game in a while--but she could use it with all her characters and for her it was worth that 25 bucks. Five years ago, I wouldn’t have spent $25 on anything virtual because it wasn’t a real thing. But we’ve kind of had to rethink the value of virtual items, and it’s certainly made a big impact on the industry.

Gordon: The consumers have more choices and, basically, it draws more innovation on the business side as well as the game development side. Free-to-play really came into its own in Korea where the hyper-competitiveness of all those MMOs wanting to charge a subscription made them realize they couldn’t do it. So now it basically is a free-to-play market.

Consumers have more choices and, basically, it draws more innovation on the business side as well as the game development side.
- Gordon Walton

Eugene: Yeah, there’s a lot more competition there. At a conference I spoke recently about how free actually leads to higher quality rather than lower quality because if everyone has moved to free, then quality is going to be the key thing that differentiates one game from another. That forces quality up not down.

Gordon: It also sharpens everything up, meaning that you can’t afford to sit there and spend money on things that players don’t want. Whereas a lot of times we build wonderful games with lots of stuff in them, and we’re always disappointed to find that we spent a lot of money on something that players either don’t like or don’t use very much. Free-to-play changes the focus to building things that players are really going to care about.

Gordon Walton

As a follow up to that, we’ve seen a lot of games make the transition from subscription to free-to-play. I’ve seen speculation from players in the MMO community that some of the more recent subscription-based games seem to have been built with the intent to go free-to-play, and that the initial subscription was a means to foot the bill for development costs. I don’t want to point any games out specifically, but do you think this sort of thing is happening? And, if so, is that fair to fans?

Gordon: [laughing] Oh, c’ somebody out.

Valerie: Who’s gonna tell? It’s not like we know anybody...

Gordon: You know, I think it’s almost ludicrous myself, that supposition. A smarter developer is actually thinking about, “What if I have to go free-to-play?” But whatever business model you choose really has a major impact on your design choices. So, I think if you are building a subscription-based game today, you’ve got to think about your fall-back position. But you’re going to make design choices around subscription that are not compatible with design choices around free-to-play. So, you have to go through a significant redesign phase if you go from subscription to free-to-play.

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