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1C: "It's almost impossible to make money even on a good game"

Thu 30 Sep 2010 7:00am GMT / 3:00am EDT / 12:00am PDT
PublishingDevelopment

Russian publisher's games boss feels high-budget titles have become too risky

Nikolay Baryshnikov, head of games at enormous Russian developer and publisher 1C, has claimed it's become too difficult to score a success with a high-budget game.

Speaking to GamesIndustry.biz recently, Baryshnikov stated that "I think the industry is in such state now that it's almost impossible to make money even on a good game.

"Because marketing budgets are tens of millions dollars, consumers are expecting that they're going to pay $40 or $60 and get amazing things. Hundred hours of gameplay, tens of thousands of hours of DVD footage, super multiplayer...

"If we did this it would be, I don't know, $200 million... If we produce something of great quality but it lacks this component or that component, then the press says, 'oh, 85 per cent. I played the game, it's kind of nice, but it has no video or any of this..'

"And the consumer says 'it doesn't have multiplayer, I'm not going to buy it.' So it's catch 22."

Barishnykov also felt that there were too many demands for consumers' attention. "Time is precious. I think there was a time when there was less entertainment, so you had millions of people spending five hours a day playing a game. Now they have lots of tempting offers fly to Germany for just 9.99, buy an iPad, play this free to play game..."

While 1C have made some forays onto larger-budget console games, with IL-2 Sturmovik: Birds of Prey and the upcoming Captain Blood, Baryshnikov felt the company would have to remain focused on smaller titles for PC and seek to expand the brands later.

"We've been successful in niches, and I think that's a good way for us to go. Try to find a niche like we did with IL2 or Rig'n'Roll or Men Of War, and try to get to the top three in the niche.

"Not compete with hundred million dollar development, with Call of Duty 7 but make the best game and target it at much smaller groups of fans. We have developed a couple of highly accepted IP so far, like King's Bounty, Men of War.

"I think it would be a good idea to continue development. We'll have a spin-off where we are actually developing a King's Bounty massive multiplayer game; maybe one day we'll take it onto consoles and maybe to iPad."

The full interview with Nikolay Baryshnikov, in which he also discusses the changing face of Russian development, whether the company can break fully into console games and his government's attitude to the industry, is available here.

23 Comments

Spend less on advertising. Advertised in more efficient manners that dont cost millions. I feel personally that marketing and advertising budgets have hyperinflated 5-10 fold over the past few years ranging from reasonably good marketing to insane levels of movie production.

And overall in terms of profit vs investment it may not always pan out well. Digital advertising, facebook and fan blog sites and some key events can limit the budget spend more efficiently I feel in this age of austerity, and ultimately word of mouth is still the strongest, cheapest most efficacious form of promotion for retail packaged goods.

Edited 1 times. Last edit by Dr. Chee Ming Wong on 30th September 2010 11:51am

Posted:4 years ago

#1

Ken Barnes Editor, Pure Xbox

8 29 3.6
Make GOOD games and you'll make money. Making a hundred different hexagon-based war games or a thousand different sub-standard FPS tiles will not do the job in the current market.

And you obviously know how to make money from your games, as you're still in business. I get emails every week about games that are due out on the Friday that approximately thirteen people will buy. Maybe realise that quantity does not make up for quality, and you'll make more money, 1C.

Edited 1 times. Last edit by Ken Barnes on 30th September 2010 12:59pm

Posted:4 years ago

#2

Greg Wilcox Creator, Destroy All Fanboys!

2,193 1,170 0.5
He's dead on in his comments. Read the next part as fast as you can.

Between needless midnight launches that have grown out of control, too many over-priced limited editions, game sales totaled like box office receipts, studios forced out of business if a game isn't reviewed well (a HUGE crime since we're in the era of console games requiring patches, which is stupid, but a necessary evil it seems with rushed dev times), a megaton of FREE content that makes some think retail games are simply too expensive, retail games that ARE too expensive that are packed with ads (which should make them far cheaper), phone/casual/touch screen/faceville on farmbook gaming that's turned more consumers who don't buy regularly into casual but core players for certain genres and critics that compare ALL platforms to each other (I've read reviews where a DS game is judged against a PS3 or 360 release... WTF?), it's a mess of nonsense that needs proper sorting out. Oh yeah, too damn many time-sucking me-too MMO's, to boot.

Normal reading speedback, ACTIVATE!

Not to mention the industry trying too damn hard to kill off boxed games and used game sales while forcing DRM and DLC down our throats as if it's the only way to go (do they even ASK the consumers without high-speed access for whatever how THEY want to continue being part of this cycle?). Feh. If they're going the download-only route, why not go all the way and sell the damn consoles online only?

Hell, who EVEN needs brick & mortar stores now? Blockbuster and many other smaller video shops are dead thanks to online movie rentals, pirates and content going mobile, so I'm imagining the industry soon seeing no need for retail at all in the next few years.

Why not control profit by saving production and shipping costs, making all your future consumers pre-purchase/pay for that next console/handheld/phone (still at a premium, of course) and games online, ship them out so they arrive on day one and watch as retail shops close down and jobs in that sector get lost for good. With no need for used games sales (or backward compatibility, since only a few consumers will want to play those smelly old games anyway, right?) and any new product being direct DLC tied to specific publishers, there goes the hobby for the poor or others who want physical media "cluttering" up their game rooms.

Hell, there go game rooms entirely - the "gamer" of the future has no collection but what's on his or her hard drive or portable device. Every room is painted white, we all wear jumpsuits, consume meals in pill form and fly around in noiseless jet packs (and fatally crash into each other on occasion when two or more spacefarmvilletris players collide while on the way to the mall) ... but I digress.

I like 1C's fantasy strategy games (King's Bounty, etc) and a few of their other titles. As for the shooters and games more cynical editos see as sub-standard. Well, there's absolutely nothing wrong with games of ALL types and qualities in the marketplace. We're sheeped into this "quality" argument when in fact, not EVERY game is going to be either a "hit" or advertised out the ass until people think it's better than it actually is.

I tend to see "B"-quality or lesser games as I do old horror and sci-fi flicks. You can toss any expectations of greatness out the window and enjoy them on their own merits. Some so-called "bad" games can actually be a lot more fun than a serious "AAA" title if you just sit back and enjoy the ride.

Provided the game isn't too buggy or broken, that is.

g.

Posted:4 years ago

#3

Kirill Yarovoy Game designer / Narrative designer / Writer

41 5 0.1
Lol what?
As one of those devs who worked for bigest Russian publishers like ND and 1C i can definitely say:
No one Russian game by russian publisher ever had anything close to what could be called "high-budget".
Only very few projects like Time-shift, Stalker and Metro 2033 (despite the fact that only one of three is russian and othere two ukrainian) have had big budget, but anyway not so big comparing to western and asian titles. And only reason these games had big budget, because their publishers and investors was no one of our 1C or ND - but was Vivendi and THQ.
Oh i almost forgot about Heroes 5, and IL2 which budget aint so big, but bigger than usual, thx to Ubisoft.

Salary that 1C-Softclub and ND pay us is total joke, risky projects happens in Russia and whole ex ussr like once in 5-10 years and almost every risky project like that (i probably mentioned most of them above) have non russian publisher who makes its budget.

But still even when western publishers pay us - russian devs for game, we still have lower salary than any of european, american and asian big-time developers.

We kinda considered as cheap labor, like Chinese employees who works hard for few cents per hour or per whole day.

Also we have very big level of piracy, because most of gamers in Russia cant just pay nor 50$ not even 20$ per game (yep most of game in russia cost you 20-30$ so thats a reason of stupid regional restrictions like one we have in StarCraft 2, Modern Warfare 2 etc, but thats another story).

Most of games produced by 1C and ND - cheap low budged trash, and they offer best jobs in russian game indsutry we can get.
So i dont know what Baryshnikov call a "big" budget, but i know that most of russian devs who have some ambitions and want to make really big titles and want to have some real salary, trying to get out of russia, leave 1C, ND and trying to get hired by big international publishers.
And i know it for sure, because i am one of them, and low salary (well others have even lower solary in russia, but still thats not enough for life in one the most expensive cities in whole world... in Moscow) forcing me and others to have 2nd part-time job out of industry or freelance, or even own small-time business.

Even 1C-Softclub is actually just a gaming sub-division of 1C, which main business is a production of business-oriented software like 1C-Buhgalteria (1C-bookkeeping) which is used by almost every organization in Russia including goverment, so 1C games is kinda 2nd part-time job for 1C itself.

High-budged in Russian game industry... huh, what a joke!

Edited 1 times. Last edit by Kirill Yarovoy on 30th September 2010 4:01pm

Posted:4 years ago

#4

John Kauderer Associate Creative Director, Atari

32 5 0.2
He's right about hitting niches.

I like how Atlus approaches the problem in the states. Port weird Japanese games you know will reach a certain niche. Keep projections and supply low, if demand dictates... re-stock. Obviously this only works if the numbers add up.

In the end take a look at how the gamers view Atlus. They have great brand fidelity. Having a loyal and vocal fan base is an excellent way to build your brand IMHO.

Posted:4 years ago

#5

Terence Gage Freelance writer

1,288 120 0.1
@ Ken - "Make GOOD games and you'll make money"

If only that were true, but so often we see good or great games underperform - such as Okami, Psychonauts, Cold Winter, Primal, I-Ninja, Sphinx and the Cursed Mummy, Oddworld: Stranger's Wrath, Grim Fandango, and so on.

Obviously the game in question appealing to its demographic and being of a certain quality is important, but I also think marketing is vital, in whatever form that may take. Juxtapositions of recent successes could be the juggernaut that is Modern Warfare 2 with its multi-million dollar marketing budget and 20 million plus sales vs. the overwhelmingly good reviews and word of mouth of Demon's Souls ensuring its relative success.

It would be fantastic if it was just great games selling well because they're great, but it's just not that simple unfortunately.

Edited 1 times. Last edit by Terence Gage on 30th September 2010 4:33pm

Posted:4 years ago

#6

Alex Sharov

1 0 0.0
@Kirill Yarovoy your profile says "Game designer, script/screenplay writer, musician. Seeking 4 job outside of Russia." And you complain about low salary? Jesus, you ARE NOT DEVELOPER, you are designer/scripter. 10 year old school kid can do your job, of course you will not get paid well. Yes please, get job in another country so we can get rid of another useless whiny "professional".

Or go back to university (if u ever been to one) and get decent profession and you will get paid in Moscow on pair with european/asian countries (still less than in USAs top dogs, but not by THAT much, as you try to put it).

Edited 2 times. Last edit by Alex Sharov on 30th September 2010 4:55pm

Posted:4 years ago

#7
Grim Fandango, the entire Oddworld series, Psychonauts -- those are all very quirky, very weird games artistically. You can't make a game like that and expect to see anything even resembling the success of a major FPS. You have to realize that a large portion of the overall market just doesn't even care about games like that, and literally will probably never even know they exist. There is an overwhelming portion of the gaming populace that will play the latest FPS, the biggest action game, their sports game of the year, and maybe a racing game -- and that's it, those are literally the only games they'll own or care to own.

While it is perhaps a bit sad to pin down absolutes, the best-selling genres tend to be solely FPS and Action (by which I mean God of War, Bayonetta, etc). A GOOD game in those genres tends to far outsell a GOOD game in a more niche genre, like 2D Platforming or Adventure.

You simply have to know the market you're playing. To begin with, it is so oversaturated with dozens of really great developers that if an avid gamer plays (or can even afford) 10-12 new games per year, then that's a huge number. So if he buys Call of Duty, 2-3 franchise games that he follows, the summer's best blockbuster, a niche multiplayer game for the Wii, and 1-2 more games in the hard-hitting fall season, that only leaves room for a couple more. This small window of "remaining" games is what countless indie developers are all fighting for.

Like I said -- know the market you're playing. If you want big success, you have to make a game that fits within those categories, and it has to be either something never seen before (Minecraft, Shadow of the Colossus, Katamari Damacy, Okami) or better/more polished than everything of its kind to come before it (Modern Warfare, Bayonetta, Uncharted 2). Also keep in mind games that are "something never seen before" most of the time end up as cult classics, whereas "better than everything to come before it" end up as the blockbusters. This is because they cater to an already-established, already-eager market just waiting for something a bit different/new to do but that's still mostly familiar to them; and as for the cult classics, these are games people remember for years that sell steadily over time through word of mouth.

Edited 1 times. Last edit by Michael Wallenstein on 30th September 2010 4:57pm

Posted:4 years ago

#8

Terence Gage Freelance writer

1,288 120 0.1
@ Michael

Oh, I'm well aware that those games I mentioned are too niche to ever sell in huge quantities, but I was merely pointing out that good games don't always sell well, otherwise - as you put it - the charts wouldn't always be ruled by sports updates or FPSs or dancing games or the like.

Posted:4 years ago

#9

Antony Cain Lecturer, Wakefield College

263 21 0.1
@Alex, you know the bulk of gameplay in things like Modern Warfare 2 are done by those "10 year old" designer/scripter types...

You can't read someone's job title and make such a big assumption. He could've been involved in anything, don't be so personal

Posted:4 years ago

#10

Rick Ellis Tech Director, ArenaNet

15 0 0.0
LOL wut is right.

So the Half-Life, CoD, WoW franchises are not making money?? So who is that carrying the buckets of money to the bank that we see??

Posted:4 years ago

#11

Russell Watson Senior Designer, Born Ready Games

86 34 0.4
@Alex

The script team at Lionhead thank you for your comments.

Posted:4 years ago

#12

Kirill Yarovoy Game designer / Narrative designer / Writer

41 5 0.1
@Alex Sharov,
guys like you "POTSRIOTS" (aka funny patriots who think that everything is so well in Russia) especially some arrogant russian programmers, who aint yet worked at game industry or just started to work, or even worked 10 years (but thats surely not about you) and think that programmers are only people who makes whole game, and who think that they are lonely did whole game when others was just messing around...

well such arrogant and selfish people like you in our Russian game industry is another reason why it so bad, and why other people want to find more kindly and consolidated western team outside of russia, which treat you like a part of united family, not like a rival or some kind of trash.

Whole Russian game industry if full of selfishness (well its probably could be said about everything in russia atm) due of people like you.

And by the way stud. - How u like that news: I used to be programmer years ago and studied in MIREA (Moscow Institute of Radio Engineering, Electronics and Automation), but tired of coding under someone's direction and moved on to game design to concentrate on whole game, instead of specific coding tasks.

And if you aint knew that - game designers and creative directors (who are basically games designers of highest level) have bigger salary than programmers assigned for specific tasks have (mostly).
So, would you be so kind - and could you not talk about things you dont know anything about?

Because you know, i dont want to insult you, but this phrase of yours "Jesus, you ARE NOT DEVELOPER, you are designer/scripter. 10 year old school kid can do your job, of course you will not get paid well." - hm, sounds like thoughts of that 10 year old school BOY, you mentioned above, who think he "knows everything" about jobs he never did.

And thats sounds so funny, so it could even be new game industry meme:

"Jesus, you are not developer, you are designer/scripter"

It reminds me "All your base are belong to us" aka AYBABTU ))

Edited 2 times. Last edit by Kirill Yarovoy on 30th September 2010 6:17pm

Posted:4 years ago

#13

John Donnelly Quality Assurance

313 38 0.1
@Alex, Personal insutls and the like are really not a good idea if someday you want to work in the industry as you never know when you might cross the path of someone else on here.
Its fully acceptable not to agree with someone on here but how you express that is very important if you want people to take you seriously.

As for the points made, well its true.. Consumers now have been sold the ideas that a game must have all the bells and wistles to make it good. It has to have that 99% review rate to be good. The store needs to start promoting it 6 months before its release to be good until and right now its only getting worse.

There are issues that the industry needs to address including budgets but this has been case for a number of years now and while some improvements have been made its still a problem and not one that can be solved overnight.

Posted:4 years ago

#14
Some thoughts:
1. There is no point in competing with AAA marketing budgets unless you are a heavily monetised AAA publisher, it is commecrial suicide.
2. Much as we wish it were otherwise there is no mid range market at the moment, you are either AAA or making small download stuff.
3. Too many countries are so rife with piracy they kill themselves as proper markets for the industry, if these were proper markets they would support mid range games.
4. It is possible with very modest marketing budgets to make cheap downloadable games and in this way seed future IP for possible mocing onto the bigger platforms in a more controlled and cost effective manner.
5. If we want to really level the playing field in terms of marketing then we should hold every director of every company (in every industry) personally liable for life for any money the company ended up owing when it went bust.. this would certainly make people think twice about what they were spending and take less risks on a corporate level (of course unfortunately there is no chance that this will ever happen, nowadays the companies most likely to be rewarded are those that take stupid risks and get lucky, or those that outbid each other to be able to back a sure thing, not those that run a tight ship)
6. Call me an old fashioned throw back to a more creative age but it sticks in my throat when I hear FPSs being branded as original games... to me they are all like sequels, upgrades and conversions of Wolfenstein/Doom. There may be originality in level design, character design, story plotting, peripheral use, weapons, achievements, what you pick up, game modes etc... but none of this is truly ORIGINAL design, it is in fact derivative design... however.....
7. In general the modern unimaginative mass public are crying out for more of the same, have no idea about the difference of potential quality between platforms and are easliy swayed by cool advertisng campaigns and most importantly, the fact that their mates think it is cool too..... this of course means that the very few titles at the top continue to clean up on the big machines. However that doesn't stop some of us from still giving it a go on the smaller platforms... we know we're not going to win the premier league but there are plenty of other trophies out there to aim for.... just don't do a Portsmouth.

Edited 1 times. Last edit by Jon Hare on 30th September 2010 6:03pm

Posted:4 years ago

#15

Kirill Yarovoy Game designer / Narrative designer / Writer

41 5 0.1
@Russell Watson - ahaha, i suppose Lionhead programmers like Keith Judge could thank Alex Sharov for some lulz ) Peter Molyneux and Josh Atkins surely will like to hear that that @Alex think that their job could be done by 10 years old kids)

Peter Molyneux probably could hire now his own son to to replace Peter in Fable 4 or Milo development, surely he will do this job well) ahaha lol at Alex Sharov)

BTW please say "did you finished your panini sticker collection" from me to Keith if you'll meet him and know him personally... he will understand)

Posted:4 years ago

#16

Yiannis Koumoutzelis Founder & Creative Director, Neriad Games

363 207 0.6
and i thank the team at Lionhead for being such wonderful and creative 10 year olds :)
Keep up the good work boys (and girls?)! Fable is one of my favourite series ever and the main reason i buy xbox!

I feel your pain Kirill, i left Greece and reached India for the love of games!
Keep it up!

On topic,
Going for niche titles is a good strategy. But you need to be serious spend wisely, put a lot of love to it and only then you have a chance the fans to recognise your efforts! Churning niche titles is not going to help much. I believe you need a combination of both. Marketing ofc, is essential for better sales, but there are more than one ways to market a game and that isn't always high budget.

Posted:4 years ago

#17

Adam Campbell Studying Games Technology, City University London

101 0 0.0
As I mentioned once before, when games costing upwards of $50 Million can be cancelled just like that, it shows everything that's wrong in the industry as far as budgets and cycles go - well not everything but I won't elaborate in this article.

On a more general note, super budgets aren't necessary to make purely great games and I think many need to review the necessity of huge budgets used for grand productions, when you see the impressive stuff coming out of tiny studios, even independents.

Posted:4 years ago

#18

Philipp Nassau Student - Business Administration (M. Sc.)

51 19 0.4
Entertainment has always been a somewhat risky market as long as you're not making sequels or spin offs. If you can't spend the money to compete with the marketing power of the big publishers just stay localized or specialized.

The return on investment is actually quite nice for some of the smaller titles. Smaller teams, low distribution costs, highly effective and yet cheap ways of advertising, all this makes up for not selling 10 million units. I really don't see why anyone would actually wish to compete with Activision. Throw every risky thing over board and continue to make well crafted yet boring IP stretchers?

After reading the whole interview I think this short article does not do Baryshnikov justice. He is far more aware of the actual situation than those short pieces suggest. Multiplayer delivers great value and can be done without hours of voice acting, one time used boss models, videos etc. This makes content creation so much more efficient. In multiplayer the content you create is recycling itself and people love it. That's the beauty of it, I pull my head for Baryshnikov there. This may also be a solution for medium sized companies. Make the good MP games, where design quality and well written code actually matter so much more and where craftsmanship shines instead of marketing budgets the moment you sell 10k+ units.

Posted:4 years ago

#19

Jordan Woodward Studying Interactive Games Design, University of Gloucestershire

79 0 0.0
Theres so many ways to make money from games now, more so than ever really. It's kinda foolish to compete with AAA titles unless you have the budget behind you for it. Companies have to adapt with the direction the industry is going and be more willing to be innovative. More and more people are willing to buy from item shops, game currency and other micro-transactions.

Also having a good idea at the right time is vital. Look at the success of PlayFish for example, right place at the right time and taking advantage of a situation. Also with Social and Casual gaming remaining strong and production costs a lot lower there is no way it's impossible.

@Alex - It's not very smart to insult a large portion of the video games industry in one statement, doesn't really help you get a job when one of those '10 year olds' may have a say in your future.

Edited 1 times. Last edit by Jordan Woodward on 1st October 2010 2:01am

Posted:4 years ago

#20

Charley Wang Studying Engineering, University of Toronto

5 0 0.0
I thought this article was interesting. Mind if I try an amateurish analysis? I apologize if this is overly simplistic, I don't mean to trivialize the issues, I just want a little practice.

Effectively, game companies need to make more money. That means either more sales or less costs.

- Sales: Price or volume. Here, raising price is not a good option. An increase in price could spur increased piracy, and there's a lot of competition in the entertainment field. Therefore focus on volume.
--- Volume: Several directions to explore. Microtransactions within a game. Smaller games -- I realize companies are doing smaller games already, what I mean is something more like DLC, add-ons for existing, popular games. Honestly though the market for many game companies is more or less fixed and it may be easier to reduce costs than to raise volume.

- Costs: Capital costs are a fairly small concern for game shops (correct me if I am wrong?) compared to other industries. So the biggest thing is probably the labour/time it takes to create a game, as well as the marketing.
--- Labour: Other posters make a great point, which I'll attempt to sweep under the umbrella of User Created Content. Games have a thriving community, why not tap into that? You can reduce costs by letting users create content for you (for free!) One idea would be to do an open beta for 'map makers,' where they will get early access to the game to play around with the content creation system, as well as a leg up on other map makers. As an added bonus, if you enable revenue-sharing with popular User Created Content, you could create a little microeconomy and, what's more, map-makers may be willing to _pay_ for enhanced development tools. This could stimulate the map making community, and might even turn a profit on dev tools
--- Marketing: As others pointed out, a little excessive. My buying decision (and I actually buy all my games legitimately) is based on 1) brand loyalty and 2) word of mouth. One or two good trailers is honestly enough to get me super excited (FF13 Versus??). I've never bought a game just because I saw it on a billboard or TV ad. Of course, I am a sample size of one, so take that as you will.

So, I guess what I'm saying is that companies should investigate policies/practices related to User Content, reduce spending on elaborate campaigns across multiple media, and look into breaking their offerings into smaller, more digestable pieces.

Thanks for reading :)

Posted:4 years ago

#21

Tim Carter Designer - Writer - Producer

576 318 0.6
This is why making the game industry's focus on "making game companies" is stupid at best.

It needs to be focussed on "making games". Projects.

That is, each-game-is-its-own-company. Project-based.

To do that, core talent - core game designers - need to think like free agents. And projects need to be put together.

Why? Because then you focus on creating slates of projects - groups of them - to mitigate risk.

The film industry figured this out years ago.

Edited 1 times. Last edit by Tim Carter on 1st October 2010 6:13am

Posted:4 years ago

#22
Great games can be made without having huge budgets. They can also make money! The idea here is to not release a game around the time of a high budget blockbuster. Think of the movie industry...would you release your 'good' movie in the same week that a movie like Avatar came out?

There are also many avenues to explore. I really don't think some teams are trying hard enough here. I would play your game if it was truly fun and a exicting gameplay. I would argue that if the industry is mostly going large scale and targeting a broad spectrum of consumers, then now is the time to go niche.

Maybe a little guerilla warfare is in order :) Use their weaknesses against them.

Edited 1 times. Last edit by Christopher Willis on 3rd October 2010 6:46pm

Posted:4 years ago

#23

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