As I mentioned before, this post started life looking at the various big budget game studios which have gone under recently. After reading it over again before posting, I decided to scrap it. While I do see the wave of studio shut-downs as being directly related to the poor profitability of games, that’s just a supposition on my part. And to list the many failing cases would be both depressing and insufficient as an argument anyway. It’s not enough to look at only the failures, you have to look at the successes as well.

And therein lies the problem. There aren’t enough successes. Sure they’re out there. World of Warcraft, Halo, COD4, Red Dead Redemption. But for every Halo there is a Haze, for every World of Warcraft there is an APB. What matters, for the health of the industry in general, is that the averages play out. It’s not enough that a hit brings in $100 million in profit, if for every hit a publisher also ships 6 titles that lose $20 million each. If every title was independent, that would be fine: quality is rewarded with profit, and its lack with loss. Businesses who make poor quality product should be punished, that is all part of a free market system.

But the problem is that the businesses at the core of the current system, the publishers, are shipping titles on both sides of the line. This is what they’ve always done. There’s nothing really wrong with that: it’s extraordinarily hard to predict in advance whether or not a title will be a success, and certainly not before a lot of money has already been sunk into the project.

What made such a system workable was that in the past, the profits on the hit titles were so much larger that they easily paid for the development of the flops. All publishers had to do was to stay on the right side of the line – make sure their hits were big enough and their flops were infrequent enough. So what has changed? Budgets.

Development budgets used to be far, far smaller. The retail price of games has stayed mostly the same, and the number of units sold has risen, not by much, but risen. But the budgets have gone insane. In any other business, the notion of accepting costs an order of magnitude higher, knowing that the incomes wouldn’t jump in the same way, would be madness. Bit by bit, the publishers have slipped to the position where only a few flops in a row is enough to cripple them.

For the games industry to be healthy again, an average game needs to be able to make money. That’s how averages work. If you have to be in the top 10 or 20% of titles just to break even, then there is 80% of the titles being made that are losing money, and those 80% cost almost as much to make as the top titles. And in the end, the funding for that top 20% comes from the same businesses that are funding the bottom 80%.

It’s not entirely the publishers’ fault – the console platform holders gave them a technology platform for which the development costs were far higher, and then took the old platforms away. No-one asked the consumer if they were prepared to pay a higher price for games on those platforms, because we knew they wouldn’t. Instead, the industry held their breath, and sucked up the increased risk and cost, hoping that they would be able to make good enough games to survive. That’s not a healthy business model.

Have you seen any new publishers enter the market recently? There’s a reason for that. Our business isn’t one that people want to get into. If publishers were making good money, for every failure because they shipped consistently poor games, another business would arise with a better focus on quality. That’s not happening – even the most experienced publishers are struggling for air.

It’s not just the publishers either. I know many developers who refuse to consider making anything but top-flight AAA titles, pushing the hardware to the limit. When it is suggested that titles on that scale aren’t profitable, they sneer, and point at the successes, and ignore the failures. They say that if being profitable means making social networking games, or mobile titles, then they don’t even want to be in the industry any more. What sort of an attitude is that? “If I can’t make these shovels out of diamonds, I don’t want to make shovels any more.” Does anyone want a diamond shovel? No. If you’re offering one for the same price as the old wood and steel shovel, then sure. But the old shovel was fine for me, and I don’t have any more money to spend on shovels than I had before.

The pre-owned market is a big indicator of the pain going around the industry at the moment. Consumers think even the current price points are far too high, so when retailers like Gamestop, etc. offer them a re-sale value that gets them the same games for cheaper, they jump at it. Why are the retailers pushing it? Because their margins were getting trimmed to the point where they couldn’t make a decent profit. Why? Because the publishers were also trying to maintain a decent profit level themselves, as risks and increased costs of development slashed their profits to ribbons.

What to do? Fix the budgets. Better efficiency. Get scope under control – no more long games for the sake of it. If one publisher takes the first step, back towards to profitability in their core business, is the consumer really going to abandon them? Will they really not buy a high quality game because it’s shorter than some other publisher’s offering? And if they don’t, what about next year, when that other publisher has gone under, and there’s no “other game” to buy?

So it is with great pleasure that we can welcome a new member of the Black Company Studios team. Daniel Holden is joining us part-time, while he also works towards his degree at Edinburgh University.

Our new and slightly larger team, at Ghillie Dhu in the West End

Dan brings much needed artistic ability to the team, and even though he’s only working a few hours a week, should give us the ability to make our prototypes look much, much prettier. Certainly much prettier than the photo above, taken in poor light conditions on an iPhone as we partook in a celebratory drink. We’re not that blurry really. Well, Tim and Dan aren’t at least; since my beard has reached full thickness, all of my edges are pretty fuzzy now.

I had a big blog post written up on various redundancies, companies folding, and how they related to game development budgets. Re-reading it now though I’m not happy about it: too much hyperbole and supposition, and very little in the way of hard facts. I’m going to scrap and re-write it I think; and rather than dwelling on the down-beat, focus instead on a general view of the overly large budgets / scope of current-gen games. Anyway, in the meantime, here’s the response I wrote up to the Westminster Scottish Affairs Committee, who are investigating the implications for the Scottish industry of the scrapping of the tax breaks scheme, which has been proposed, ignored, accepted, and then scrapped. Not that I think it affects the Scottish industry much now – RTW might have made use of it, none of the remaining developers really stand to gain very much from it as it was. Anyway, I don’t mind making my response open.

Executive Summary:

If the government wants to help the games industry, rather than through relief on corporation tax, it should do so by improving the quality of the talent pool. By supporting education, apprenticeships and internships within games developers, and making it easier and cheaper to hire talented but inexperienced staff. In doing so, it will help maintain the UK’s competitiveness as a creative centre, and the returns in increased profitability for UK developers should pay for the incentive schemes. Any incentive scheme which rewards large non-UK publishers will in my view be less effective than one which supports the myriad of smaller developers, many of which are wholly UK-owned.

Full Response:

Sadly, since the original request for input to this inquiry, the Scottish games industry has suffered a serious blow in the loss of Realtime Worlds. I would like to start by raising my voice against the ridiculous notion put forth by various MPs to the media that the previously cancelled tax-breaks proposal would have somehow prevented this company’s failure. The scheme proposed relief on corporation tax, and Realtime Worlds’ issues were certainly not down to being too heavily taxed.

I run a small studio that provides development support services to the wider games industry, primarily in the UK. We are members of the trade association TIGA, whom I believe will also contribute to this inquiry. TIGA were instrumental in persuading the previous government to take up the proposed tax relief scheme, but I must confess that I am not and never have been entirely convinced that their proposal is the best approach to boost the industry.

When the current government announced the scheme would be scrapped, I cannot say that I was concerned. It had never been implemented, only proposed in loose terms by the previous government. I doubt it would have ever made it to implementation. Its absence will not hurt the Scottish games industry, where the only sizeable developer left (Rockstar North) is foreign owned, and solid for other reasons than financial ones. The smaller developers left here are not in a position to expand massively, tax-breaks or not.

While corporation tax-breaks would I’m sure attract inward investment to the UK as a whole, their nature is such that the biggest winners in such a scheme are large, multi-national publisher/developer corporations. Implementing tax breaks might attract them to form or expand studios here, but aside from the direct investment here, their profits still largely go abroad. Once in place, it seems to me that removing those tax-breaks would quickly lead to studios being declared unprofitable and being shut down again, such is the fickle nature of games development.

Furthermore, subsidising the industry solely because the French and Canadian governments do seems to me to be a dead end road that can only end in subsidies escalating out of control. Yes, we are losing development talent to Canada, and the more developers that go out of business here, the more of our talented workforce will emigrate there. But when studios go bust, their talent doesn’t just leave the country, some also leave the industry, and our available workforce pool is diminished. The tightening belts of the publishers and financiers of the industry don’t allow developers the leeway they need to recruit and train new talent, and that hurts the industry both now and in the long term.

I don’t want to see subsidies for general game development. I don’t want to see incentives to make culturally British games (although I do think that there should be more of them made). What I think the government should be doing is to support what makes the UK competitive in the world market: our creative talent. We need more developers doing innovative, creative things. We can’t compete with Eastern Europe or Asia on labour cost, but we can compete on labour quality. But for that developers have to be able to take in new talent, new ideas, and reinforce a waning labour pool.

I would propose subsidies for education and training. And since the only kind of training that is really effective in the games industry is on-the-job, what I would like to see is more support from the government to get students and young people inside developers and doing real work. Apprenticeships for game developers almost. I’d like to see real financial support for developers who want to take on inexperienced but talented people. That might take the form of subsidised placements, internships, or PAYE relief on students. The universities like Abertay are doing well with their industry outreach efforts, but with better financial support they could do far better. The developers want the talent, but they can’t afford to take risks in hiring, or to get the people up to a useful level of productivity. The universities want to get their graduates into the industry. The government wants the students in jobs, and it wants the developers healthy and profitable.

So in summation, if the government wants to help the games industry, it should do so by reducing the real costs UK developers have: the staff. In doing so they will enrich the talent pool, maintain the UK’s competitiveness as a creative centre, and the returns in increased profitability should pay for the incentive schemes.

The microwave in our office is quite annoying. I mean, it does its job: nuking food with radiation, but to actually persuade it to get that far is an unnecessary chore. It’s got a numeric keypad, plus another half dozen control buttons and a start button. If I want to get it to heat my soup, I have to press Time, punch in 3,0,0, then Power, then Start. To be honest, I don’t even know what those other 4 buttons do, and I’m a tech savvy person. We have that self same sequence written out in a note taped to the top of the microwave, since it’s exactly what you want to do 95% of the time.

Which is what bugs me about the whole thing. The product designers have added a whole mess of extra buttons, all of which adds to the cost of the product, to satisfy controllability that we really just don’t use. Even that last 5% of the time, if we didn’t have that extra controllability, we’d be able to just make do. It’s not a surprise to me that industrial microwaves have pretty much two controls: a dial for power, and a dial for time. Anything more smacks of designers trying to justify their own salary, or interference from people who don’t really understand their customers. To be honest even those two controls are overkill. A single button that adds 30 seconds to the clock and starts the microwave (if it’s not already started), and another to cancel. Simplicity.

This isn’t just a rant about our microwave. Okay, well maybe a little bit. But it’s a design principle that goes through everything, games design included. Understanding what your users want to do in the majority of cases, and give them just what they want, but resist the temptation to drown that out with other minor features. It’s not just user interfaces, it’s features as well. Even with the best interface in the world, games or tools that try to over-complicate things end up suffering. Not only do those features take valuable developer time to implement, they’re almost certainly going to increase the odds of those features adversely interacting with the important core features.

So why put in unnecessary features? Many reasons:

Of course it would be easy to take this advice, and ship a project with only a few features, claiming to be keeping things ‘clean’ and ‘simple’, even though they omit the features the customer is really most interested in. As always there is a balance to be struck. The important thing is to understand both the product/game you’re making, and the people who want to use/play it.

So basically I’m pleading with the game and product designers out there: add features sparingly. Not only do you keep your development costs down, you improve your chances of making a cleaner, more usable product, that fits better with what your customers want.

This week’s normal blog post has been supplanted, sadly, after news broke of Realtime Worlds going down earlier in the week. I was intending to write a post anyway, after the news that 60 people were to be trimmed as a result of their Project Myworld not finding an investor, but the urgency wasn’t really there. It looked that ostensibly things were being wound down in some kind of graceful way, which, while sad, is just the nature of the beast. Everyone knew that the large team that had been ramped up to deliver APB would be unsustainable, given the absence of a large income stream from that game, or anything else signed. It was always going to stand or fall on APB’s quality, and that was apparent a couple of months ago now. But we gave them the benefit of the doubt.

That was late last week though. Come Tuesday afternoon, news surfaced that there had just been a company meeting to announce that the administrators had been called in. And not in a graceful, let’s wind things down sort of way. In an almighty, we’re all out of money, and by the way you’re not getting paid for August sort of way. While that’s not unprecedented (when VIS went down, they at least had the courtesy to do so immediately after a pay-day so no-one did any work that wasn’t going to be paid for; but DC went down with unpaid wages), I don’t think it’s ever forgivable. But the difference was, those other studios had been operating milestone to milestone for a long while, burning through their cash. RTW had their investment up front, they knew what money was coming in, and when it would stop. To go under leaving unpaid wages (and word is, a bunch of trade debt as well) is to me a massively negligent failing of those in charge.

The whole affair smacks of senior management, knowing they’d burnt through all their cash (and let’s not forget, that’s over $100m), and yet continuing to operate. APB had run over its development timescale, that was public knowledge, but if they didn’t have enough money to operate beyond its launch, this mess should have been sorted out when they realised what was going to happen. I’m sure they thought that to do so would further damage the APB launch: who would want to invest time in an MMO if it looked like the developer was going to go bust even before launch. That doesn’t excuse screwing over your employees: they chose to gamble everything on persuading new investors to save them. And since they’d already failed to show that they could deliver on the sort of projects they claimed to have expertise in, I don’t know how they thought anyone would believe them.

I’m sure there will be more details and analysis from those who saw this mess from the inside. Even last week, this RTW person let go in the MyWorld redundancies put an insightful but damning post over on Rock Paper Shotgun. I’ll come back to this one once more of the details have become clear. Sadly, even if a phoenix company does ride from the ashes (again stirring memories of DC and their similarly resurrection), it will be a dim shadow of what RTW once was. While there are still several good businesses in Dundee doing alright, the heart has been cut out of the industry, both in Dundee and in Scotland in general. We’ll lose a lot of good talented people, because there is no-where else with the capacity to pick them up. Again, Scottish development will take years to rebuild, if indeed we ever manage it.

Next time, I think, will be a rant about development budgets, and how they’re hurting us all.

It’s probably entirely escaped your notice (or at least it should have done), that we’ve upgraded to WordPress 3.0.1 recently. Everything should be exactly as it was before, externally at least. Please let me know if anything looks off of course. Doing that little bit of maintenance has reminded me that it’s probably time to update the website in general though. I have been meaning to make a little section for our iPhone games and applications, although probably that’s easiest done in the blog itself. More importantly however will be to update our About pages to include more recent endeavours.

In other, unrelated news, I’ve been answering questions over at the beta of the GameDev StackExchange site. It reminds me of all the reasons why I would get annoyed at gamedev.net et al; basically that since there is no barrier to entry, anyone can both ask stupid questions and give stupid answers. So you get people replying who aren’t professional game developers and have a very limited set of experience making ‘games’, but who have a very high opinion of their ability. However, since the original StackOverflow site has become a useful resource in its own right, despite the equally large numbers of “please help me with my homework” questions, and poor quality answers, I thought I would give this one the benefit of the doubt. I would heartily recommend any of my peers who have some free time to go over and contribute as well: while you can’t do much to begin with (new users can’t even vote good answers up), it only takes a couple of questions answered sensibly to elevate you from the rank of untrusted outsider to someone who can contribute. And as long as it’s people with real knowledge of the industry voting up the real solutions, I think there’s a good chance that there gets to be some content there that’s useful to the games industry in general.

Finally gotten around to putting VS2010 on this machine, and this time around I’m breaking with tradition and simply not putting MSDN on there, at all. It used to be a no-brainer, put the reference libraries on as you’re going to be looking stuff up all the time. But these days it was always more an exercise in frustration than a useful tool.

Many topics are just “not there”. Huge swathes of really basic stuff are just missing (basic date formatting string specifiers – that’s pretty low level!), so that when you navigate to them it tells you the page is missing. Go online to the MSDN reference there, and you’ll find the page, just not in the locally installed copy. I thought to begin with it was just because I’d installed it badly, but even from a clean install it was still just not there. I’ve since concluded that it must be the Express versions are just subsets of the full documentation, to keep the downloads small. It’s certainly not a functionality split – like they’re only putting in help topics for things in the Express editions – because the Express editions are really quite close to fully functional. No, this is stuff that’s core to .NET and the language.

So, since I’m having to fall back on searching the internet anyway, I figure I might as well have my hard disk space back. The online resources available now are fantastic anyway, and it’s rare that I’m not connected when developing. Most often it’s the online MSDN references that show up first in the search, so in the end it’s much of a muchness – except I don’t have to use the horrible HTML help interface which has been getting steadily worse with every revision of Visual Studio.

I guess this is just another nail in the coffin of the disconnected computer: so many things now expect/assume/require you to be connected to the Internet. Which wouldn’t be so bad, but even with 3G connectivity, a network connection while on the move still isn’t something that can be taken for granted. But I’ll stop grouching about it like an old man, and go with the flow…

New link over in the right hand panel: GameDevBlogs.net Not to be confused with Jamie Fristom/Torpex’s GameDevBlog.com, to which we also link!

Basically it’s a new site to bring together many of the interesting game development blogs that are out there. Good to see a common location where you can go to read and discuss the game-dev news of the day, dip into the day-to-day life of various small developers like us, and generally learn something new. Go, read, enjoy!

It’s very strange, after having had so much to do solidly for so long a time, to be able to pick and choose what to work on again. There was a big stack of paperwork, of course, including our end-of-year accounts for 2009/10. And my desks had degenerated into a big pile of letters, both spam and ham. So clearing that was a requirement, not just a nicety. But aside from clearing those backlogs, the decision as to what to work on next has been quite tricky. In the end I opted to try and catch up on Tim in terms of iPhone knowledge. Tim has done the vast majority of the work on our iPhone apps so far, and despite working on the UI design with him, I’ve not had any time to get my hands dirty with implementation. So with some free time to play with, it was time to get some serious crash-course learning done.

Cue some virtual attendance of CS193P, the iPhone Application developer course from Stanford University. Taught by developers from Apple, and with all of their lectures videoed and put online, it has been a great way to get quickly up to speed with Objective-C and Cocoa Touch development. Of course that’s not the only way to develop for iPhone, you can (and in my opinion, should) implement the large part of any game or simulation app in standard C/C++. But for working with the iPhone operating system, and implementing interfaces (arguably where the real challenge and value in an iPhone app lies), it has to be done in Objective-C.

Stanford U

So while Tim was busy with some other work-for-hire, I took the opportunity to bash through the majority of the CS193P course, and start to tackle an app idea we’ve been talking about for a while: the Drunk Compass. More on that in later blog posts. Actually watching the lectures brought back a load of memories of university: it was nice to remember a time when all I had to do was take in as much knowledge as possible and try to retain it long enough to pass exams with.

Thankfully, as this was just one course, condensed, it didn’t last long enough to evoke the things that annoyed me about university: the feeling that I was always doing throw-away coursework. I’ve always preferred the hands-on approach, and by the time my university career ended, I was already itching to make something real, and loose it on the world. A shame then that my first shipped title with VIS didn’t see the light of day until 5 years later (although technically i-Race shipped much earlier than that).

Anyway, learning is good, and I think it’s been a welcome change of pace after the hectic nature of Crackdown 2 or our other client work. Hopefully now that I’m comfortable with the Cocoa interface tools, I can prototype our most promising app idea, and get it one step closer to reality.

And so it has arrived. Finally, and after much Herculean effort from all involved, we have given life to a healthy baby game. Okay, so it’s more of a hulking 250 pound armoured law enforcer than a baby, but I’m still proud of it like a child. It’s occupied more than 14 months of my time so far, so it’s a great feeling to know that it’s soon to see the light of day.

Crackdown 2

It’s weird, I’ve spent the last month and a half working with the MGS and Ruffian teams to take the game they’d made and turn it into a demo form; I thought I wouldn’t want to play the demo again. I’d play the full game, sure, because I’ve never actually made it all the way through without cheating, and it’s a game where the pleasure is in the journey, not in the destination. But the demo is 30 minutes from the start of the game, and your progress isn’t saved, so I thought I’d just skip it and go to the main game. My wife and family finally got me an XBox 360 for my birthday on Friday, along with a stack of games (Halo 3, Halo: ODST, Forza 3, Bioshock 2, Assassin’s Creed 2), so I wasn’t short of things to play.

But like a digital drug, I found myself using my demo preview code, and playing the demo. I knew what to expect, and that didn’t make it any less fun. Shooting, punching, kicking, driving, exploding, all over the island. Not just once either. Four times through, to get 7 out of the 10 possible demo achievements. I even got my wife to play it through as well. That one I pretended was research for work: you don’t get much more inexperienced at 3rd person games than Vicki, and I wanted to see if we’d pitched the demo opening right. We had – she picked it up surprisingly quickly, didn’t die until much further into the demo than I’d expected. More pride – we’ve made something that can appeal to not only the hard-core, dedicated Crackdown fans, but also to newbies as well. Crackdown for everyone!

Ruffian Games

Not that I can take much credit for that really, it’s the stellar team at Ruffian who have done a fantastic job on the game. I’ve been privileged to work with them, and the wider team at Microsoft. This has been the biggest budget game I’ve worked on to date, with the highest aspirations, and the highest quality bar. It’s been a real eye-opener, and a great experience. Both teams are chock full of talented, enthusiastic folks, and my passion for the title they’ve matched and exceeded at every turn. I’ve got to give a special appreciation to our ex-colleague Peter Mackay as well – who went to Ruffian after leaving us last year. He’s done a great job on the audio for Crackdown 2, allowing the quality audio design to shine through. I was sorry to lose him as a team-mate, but I think he’s found a great new role at Ruffian.

The demo you can get your hands on tomorrow (June 21st), and the full game will hit the shelves from the July 6th. Get to work Agent!