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Codemasters' Rod Cousens Part 1

Mon 15 Nov 2010 8:29am GMT / 3:29am EST / 12:29am PST
BusinessPublishing

The CEO talks F1 paranoia and addresses the persistent rumours about the health of the company

Codemasters

Taken from MobyGames.com:

Codemasters develops and publishes video games for Sony, Nintendo and Microsoft...

codemasters.com

Six months on from a major financial investment from Reliance Big Media, Codemasters is ending 2010 with another massive racing hit on its hands - its first attempt at a Formula One title on the high-definition home consoles with F1 2010. But the game has its critics, with a vocal community displeased with what they saw as many bugs in the final release, now patched.

Clearly, the company is still going through significant changes after a rough few years, and losing senior staff on new IP Bodycount has helped stem the gossip surrounding the business. Here, in this exclusive interview with GamesIndustry.biz, CEO Rod Cousens addresses the persistent rumours that follow the company, why he believes the publisher doesn't get the credit it deserves, his assessment of some of the competition, and what's next for the F1 and Operation: Flashpoint franchises.

Q: We're around half a year on from the Reliance deal now - how would you appraise that relationship now?

Rod Cousens: It's bedded in well - as a partner, with Balderton, they've proved themselves to be value added, and I'm not simply talking about the financial consideration. They've integrated well, introduced us to aspects of new markets, including the obvious one which is India.

They've used their relationships around the world, both in terms of the movie industry - they're an investor in Dreamworks - and also in the online space, and their relationships with some of the guys in San Francisco and the access to the Indian market.

On top of that there are the aspects that are value added in areas that we're already in - such as Formula One - and the significance of that as a venue in the next twelve months.

So there's a lot more to it than simply the financial side - and having a company the size of Reliance, as the single largest investor, is no bad thing.

Q: When we last spoke, when the deal was announced, you mentioned the mobile company they own - have there been any manifestations of that relationship bearing fruit yet?

Rod Cousens: The obvious one is cricket, because that's the number one sport in the Indian market. They've created the cricket game for the mobile space for us, coming off of our franchises, some of the assets we'd already created for the game.

It also enables us to maintain access to a sector of the mobile area that is relevant to India, but perhaps less so in the rest of the world, and that's the old featureset of mobile phones. That's found money for us really, if you look at it in context.

I do think, if you try and take a macro view of the company and where it all goes - and I don't want to labour this point - but if you pay heed to the macro-economic forecast for the next ten years... I don't attach great value to it, because for every one they get right, they get them wrong too.

But I don't think you can argue with the emergence of the markets such as China, India and Brazil. Even if they're only half right, I'll take that - and for us to have a relationship with a partner giving us access to markets where the economists are suggesting are the high growth markets of tomorrow, I think in many ways that places us in a much more favourable position than far more substantial and established companies than ourselves.

If you take that down the food chain, it does manifest itself into aspects such as mobile cricket for the Indian market, which is here and now, and that's added to our projections for the coming years. That's why, strategically, it's a great partnership to have.

Q: "Better placed than most for the future," was the phrase you used before - clearly that's an assessment you still agree with.

Rod Cousens: Apart from us as a company, if you look at the industry, it's faced challenges. The social gaming revolution, as some people may call it; technological shifts; monetisation, in terms of business models; the economic downturn, where the retail community has become very cautious.

What was defined as traditional publishing was going through almost a perfect storm - they were all losing money, including us, and some were better equipped financially to withstand that than we were. It was certainly a period of challenge for us, and to come out of that period with a partner where there is the financial strength that they have, there is a business model which - if you define it in terms of monetisation, Asia has been the future in leading micro-transactions, and things like that.

So I do think it's there, it's in-house and in our toolbox, and we are better placed than some who have still got to do that.

Our fiscal year two years ago was probably our worst fiscal performance in the history of the company, and we take no pride in that. But it was something that we had to do - the current fiscal year is looking pretty good, and aside from the changes that I've just talked about, the success of F1 2010 is tremendous for us.

So I believe as a company that a lot of the heavy lifting has been done, in terms of the financial realignment - but I also think a lot of heavy lifting has been done in terms of the directional and technological aspects that we're trying to target.

We've got a partner that can leverage that up - so that's why I say it. I feel as strongly as I did when I made that comment, and I probably had a lot less information in terms of what they were at that time.

Q: Good to hear that this fiscal year is looking pretty good - but I'm sure you'll be aware that rumours about the health of the company persist. Why is that, do you think?

Rod Cousens: Part of it is the industry we're in. I don't trade in rumours, because I think it's a destructive force, but there are rumours I hear about other companies - some of them are clearly unfounded, and some of them may have an element of truth.

There is no doubt that coming out of the position we were in is not something that's turned around overnight, and there is a lag. There's a lag from creditors and so on that we've still addressed, and they can fuel those rumours - clearly.

But they should also put it in the context that 50 per cent of Codemasters' stock is owned by one of the biggest companies in the world. That company continues to invest in us, it continues to look to us to expand our horizons - whether that's in emerging markets or emerging segments. That company continues to make financial investments in us.

I think there's a lot of ill-informed speculation that's traded out there that has very little substance to it.

Apart from the intricacies of the shareholding structure that sites behind us - which I can understand people not being informed on, or being able to take a view on - where it's particularly galling is where you come off of the back of a 2 million-seller that's F1 2010 that any other software house in the world, regardless of size, would like to have in their portfolio... a number of whom had that opportunity and dismissed it.

Q: And that's a 2 million-seller that is the start of a franchise for Codemasters?

Rod Cousens: And that's just in the first month as well - and we all know that as a sport, Formula One's roots are within Europe and Asia, and yet the largest single market in the world is the US. So that 2 million units has been achieved largely without the United States... and if you translated that up on a pro rata basis that's the equivalent of a 4 million-seller.

I challenge anyone that wouldn't want that. I'm sure they're all knocking on Bernie Ecclestone's door, trying to take the license away from us.

What we don't do as an industry is give enough credit, and it's very easy to knock. We're not complacent as a company, but we're difficult to beat in racing - and someone should give us credit for that.

In the same way that I believe Electronic Arts with FIFA have done a tremendous job - that's come about because they've got 20-plus years invested in development; it's come about with Codemasters and racing because we've got 20-plus years of development. It's not the last two years that we've put into F1 2010 - the game has had the benefit of the expertise, the technology, the DNA that is Codemasters in racing.

For someone to think they can simply come along and try and entice that away with a cheque is unrealistic.

Q: You mention technology - F1 2010 certainly bears the hallmarks of the EGO engine. How important has that investment in technology been?

Rod Cousens: It's a huge advantage. I think one of the understated values of Codemasters is the EGO technology. We've not dependent on going to other people.

We're sat in a building [in Guildford, UK] that used to be Criterion - this is the very building that I came across Burnout in, when I was at Acclaim. As a company we have not needed to go out to a third party middleware provider, where a lot of our peers are dependent on those providers.

There's a history in our industry of them being bought - and then causing complete disarray to your future product output.

Q: Although few of those acquisitions are for the tech alone; if such a deal hamstrings a competitor, all the better, no doubt.

Rod Cousens: Of course. So for us to have 100 per cent ownership of our core engine technology, which is format-agnostic and segment-agnostic, is a huge plus. I think it's a real value to this company; in many ways I think it's the value to this company. It's the heartbeat, the midfield dynamo.

Q: I guess people will look at the company's dedication to the racing genre and pigeon-hole the EGO engine accordingly - although I'm sure that you'll be looking to modify that thinking with releases in the next twelve months?

Rod Cousens: We answered the first question mark in that regard with the release of Operation Flashpoint. If you look at franchises, they evolve and for the most part get stronger. People talk about Grand Theft Auto, but in its first two versions it wasn't a commercial success - or if it was, why did BMG get rid of it? And Gremlin, and Ocean, and Infogrames, when it was there in the midst.

To have found itself in the bosom of Take-Two... this industry is littered with the wise men after the event. But we're all clever, and we know what we're doing [smiles] Nobody when they looked at it, what it was...

Q: I remember people being particularly scathing about both the Nintendo DS and Wii consoles when they launched...

Rod Cousens: You're 100 per cent right. I believe we've demonstrated the effectiveness and viability of the EGO engine with Operation Flashpoint. It's a proven technology across multiple genres, and I think the actual game that's Flashpoint gets stronger with each rendition. We'll prove that when we ship the next version next year.

Q: And one of the reasons for the success of Flashpoint last year was that it managed to carve out its own place in the crowded FPS genre; but I'm sure even EA would admit that Medal of Honor didn't quite hit the quality bar they were looking for, and that's likely to have a knock-on effect on sales. It shows how tough it is to compete, and I'm sure they didn't cut too many corners on investment...

Rod Cousens: But I think it takes time. First of all, if you're in the top spot, nothing is forever. Hanging on to it isn't easy - so anyone that just takes that as a given is misguided; because there's an awful lot of work done by these companies.

Don't forget we can all witness over the years.... I can remember people telling me that the end of FIFA was nigh, and that Pro Evolution Soccer was where it was at, but I would say over the last two years EA has put clear water between them.

When they're down, and they're a wounded animal, they're never more dangerous. I think the version of Medal of Honor that's gone out is not how you should judge EA; judge it when they've had another two or three goes at it.

Q: And we probably shouldn't forget the evolution of the Battlefield franchise, either.

Rod Cousens: The quality of the product, in six or eight titles - I'm not a critic, and I think that's a failing of our industry. Because we're in an industry that we should all want to grow, and you need those successes.

They've had their pain, but there isn't a software house in the world that hasn't. That's the way it is - there isn't a traditional magazine publisher that hasn't had its pain.

We see Flashpoint as a long term franchise that will not only continue to improve in quality, but will also broaden in terms of its reach and appeal. We do want to sit in a different space to where Call of Duty and Medal of Honor is.

There's a fanbase called CodeM of about 2 million people, and if I got one message from them when I walked into this company, it was to create another Flashpoint. So we did - we embarked on, brought it in-house and did it using EGO technology.

Was it everything we wanted it to be? No, it wasn't. But was it a disappointment? No, it wasn't. I'd say it was a very good first attempt of where we're going to take it.

We know we do good racing, so how are we going to compete? We can compete with 1-1.5 million units on Flashpoint. That's good for us, compared to your point about the Medal of Honor budgets. We're comfortable where we sit as a company.

We believe we've got racing - now, if I'm some of my competition and I've looked at the performance of Blur and Split/Second, I'd rather have my problems.

Q: Part of that is surely about the challenges for bringing new IP to market though, isn't it? That seems to be a particular problem in the last two years.

Rod Cousens: Yes - you can be very good, but to get into that zone right at the top, it's that 0.01 of a per cent. These racing games can be good, and they can give the consumer a decent experience - but to come in and take that spot, which is where I believe we sit, is that 0.01 per cent that's the hardest to attain.

We will do it again - don't forget that with F1 2010 that came out of a studio that was an action studio. That's testimony to the user-friendliness of EGO, that they've come out with an 8.5-9 out of 10 game. And it will only get better.

Where we sit - the underlying technology, where we can take racing, whether that's F1, GRiD or DiRT... and now what we're going to do with action - plus alongside all that we've going to give them brand extensions.

We'll do Formula One as a browser-based game; we're going to do another Formula One game as well - so we'll extend these brands, and you'll see us do that in Flashpoint, in Cricket, in DiRT and things like that... We only have to do five games per year.

Rod Cousens is CEO of Codemasters. Interview by Phil Elliott.

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