Picking up where we left off yesterday, we continue our interview with Codemasters CEO Rod Cousens, as he discusses the firm's multipurpose EGO engine, the testing and approval process, the evolution of DLC and the role of retailers and the second-hand market.
Q: You've invested in the EGO technology, and it seems to be paying off - but is that something you'd look to monetise further by licensing out?
Rod Cousens: No - I'd prefer at the stage where we are to keep it in-house, because I think it gives us a competitive advantage.
Q: And that's more important at this point?
Rod Cousens: I get selfish about that. I think the technology has been recognised outside of videogames, because we've worked outside of the industry with people. For example, car manufacturers want to have that virtual experience to sell their cars, so we don't have a problem with that - because they're not direct competitors.
And where we're working with second parties, external development groups, what we're not prepared to do is compromise on quality - so we will then deploy the EGO technology working with them. We're not the biggest software house in the world, we haven't got the greatest output in the world - but we're not prepared to compromise on quality
We're very innovative, and we're not going to stand still on Formula One - we're not going to come up with a game that sticks a couple more tracks in, the new drivers, and that's it; we're going to continue to develop the franchise, we're going to continue to create an experience that builds the consumer community, we'll extend the brand through the online segment and we're going to continually improve the quality.
Q: On F1 2010 specifically, perhaps because of the passion of Formula One fans, it can be a difficult audience to please completely. They have pretty high expectations; obviously a patch for the game has just been released, but were you surprised by the vehemence of the community?
Rod Cousens: Yeah, although some of them switched pretty quickly in a short period of time... but as I get older in life one of the old cliches that's come to bear truth is that you can't please all of the people all of the time. Even when you're a huge success, you'll never be able to do that.
But we do respond as a company to constructive criticism, we do strive continuously to improve, and we don't lose sight of the fact that the consumer is right. While you have to pay attention to your audience, they have an entitlement to their views and we have to respond to it.
Some of those views I don't necessarily share, and there are reasons for compromise sometimes which are beyond the obvious. You have to put it in context, but we try to listen to what our consumers say and always strive to improve, but knowing you can't please all of them all the time.
Q: How difficult has testing today's games comprehensively become?
Rod Cousens: That's exactly right - a game in real terms, if you pulled out of the equation the financial aspect... which the consumer would want, because they'd want it for free... that's always an argument when people say they sold more when they dropped the price. How many would you sell if you gave it away for free? Let's continue down this path of destruction...
But if you took the financial aspect out of it, and you went to the purists in the development studios, a game would never be finished. In real terms, it's never, ever finished and never, ever good enough - but when you've given the consumer a 9 out of 10 game that gives them 10-15 hours of entertainment, I think they've got good value and the software publishers have done a good job.
Q: That said, there were some tweaks that needed to be made; the game was out for a little before the patch was released - would you have preferred to have seen that out a bit sooner?
Rod Cousens: If you knew them you would, but half the time you don't. Don't forget, apart from our exhaustive QA process it goes through first party, and they didn't pick on things either - and both are rigid. We're not going to publish something that's inadequate in any way, shape or form.
But it's one thing play-testing with 100-200 people in QA, and a similar amount at first party - and then going to an audience of 2 million people. They will find something - it is what it is. Would you rather, with the benefit of hindsight, have fixed it? Of course.
Q: Expectations have changed, though, haven't they? This is a game that would have traditionally been a classic boxed retail game - fire-and-forget. But now on consoles, most get patched or updated... is that acceptable, or just part of reality now?
Rod Cousens: You don't want it to be acceptable - you try for it not to happen. But there is another element in this, and I was talking to Bernie Ecclestone about this last week -
Q: You're a shameless name-dropper!
Rod Cousens: I had no choice, I was summoned! But how do they ever approve a Formula One game? Because we've got people that do nothing else but this. Sony and Microsoft do. And Formula One management, which represent the teams don't have that.
Now as we progress to basically a delivery of the F1 experience in real-time online, how do they do that? Knowing what you know about technology, and what can happen at some random point... it's virtually impossible.
The more you try to do, the more you try improve, you also create in the midst - it's gene mutation, we're into bloody genetically-modified crops that everybody's worried about [laughs]
Q: You said that 2 million people bought the game in the first month, but actually, how many people do you think played it? I'm alluding to the pre-owned market, obviously.
Rod Cousens: Pre-owned or piracy... don't forget it was out on PC too - and I got an email from a competitor saying that they knew of at least 600,000 illegal downloads of the game. It's an impossible question to answer.
Q: Doesn't that make you shy away from the PC market?
Rod Cousens: Well, go back to the macro-economic question. If you want to access the emerging markets, you've got to be on PC. You're not going to sell many PS3 games in India or China, so I don't think we can shy away from it - but I think how we deliver it probably needs a rethink.
I've spoken on panels about retail, and everyone's looking for confrontation - I have no problem being confrontational, but going back to your previous question about retail, the reality is that the business model needs to change. It's not inconceivable to say that we send out a Formula One game that's not complete - maybe it's got six tracks... I could never get away with that with FOM, but as an example...
Then they have to buy their next track, and you follow it around the world. When you turn up in Abu Dhabi you have to pay for the circuit, and whatever the changes are to the cars that are put through. That, I think, would deal with a lot of it, and also address the pre-owned.
Pre-owned isn't actually new - in 1981 there was Buy and Try, and that type of stuff. The difference was that it wasn't a significant percentage of the market, and it was never promoted as aggressively through the retail community as it is today.
You could argue for the retailer in that context, but also what it's done is kill things like subsequent exploitation in platinum and classics... and it expands the potential for piracy by default. They would argue that prices would suggest otherwise - I would say not, because by the time you get down through the food chain, a thing gets more and more ripped off.
So my view is that it needs to be managed. I don't believe that retail is going to disappear soon - I also believe that 35 per cent of the world market that doesn't have broadband, and its only access it through retail, is still a significant part to any content creator.
What we have to figure out is how we're going to work together to make this happen. If retail takes a confrontational point of view and says that if we go online, they won't stock the box - and publishers then say that all they're going to do is put out DLC after launch that retail can't participate in... it's ridiculous.
Actually, you need them to get to the stage where they stock the box. It's not inconceivable that you're going to ask them to give the box away at some point in time. But then, they participate to an extent in the subsequent DLC exploitation.
How does that happen? Maybe it is through a code, or whatever - but it's stuff like that which I believe between us all we'll figure out. The music industry is dead, right? Well, not that I look at, it's bigger than it's ever been, it's just changed its shape.
Q: I had a conversation with HMV CEO Simon Fox along similar lines. Thinking ahead to PEGI next year, how important a touch point with the consumer do you think retail is? Some would say there's a job that needs to be done face-to-face that nobody else can really do.
Rod Cousens: I think we all have a place. I don't think they go away. What period of time are we talking about, 5 years or 25 years? If we're talking about five years, the hardware platforms still need to get sold out there. I can talk about the concept of the cloud - I can buy into that - but commercially within the next five years, there's a big question mark.
So we are where we are, and at the end of the day, if I'm a hardware vendor I need my boxes out there, and my only avenue for that is through retail. Maybe they should give larger discounts on the hardware and smaller discounts on the software, and the model needs to change - and we all figure it out? That's what I mean - I think we all need each other, at least for the next five years, and maybe longer.
Q: You can understand the viewpoint of specialist retailers, where if you took away pre-owned revenues I think it's fair to say we'd see more store closures. But does it frustrate you when you see supermarkets or other big mainstream chains jumping in to pre-owned as well?
Rod Cousens: Yes - the way it's structured today is destructive, and it's negative to creativity and innovation. I believe it has to be managed - there's an element of it which is acceptable, and there's an element that isn't.
If the content creators could participate in the secondary or subsequent exploitation, I think that's fair game. I think equally the retailer then has an argument that he should participate in some of the DLC, which they ordinarily wouldn't. By default, you manage the process.
What I don't buy off on is that retailers are responding to pre-owned because that's what consumer traffic tells them. As I said earlier, if you put the price at zero, you'll get even more traffic, but where does that go? It's nonsensical, and what is it taking out elsewhere?
The figures put out by retailers are on the aggregate of their total revenue, but what is it on a specific software format? Then you'll see its significance. If the response of specialist stores to the growth of supermarket is to deal with it in this way, they're going to lose.
When you've got Sainsbury's putting a game out at £25... I can take from that the retailer is telling us it doesn't need any margin.
Q: But supermarkets can get away with that, though.
Rod Cousens: I think we all need to sit around a table and see how we're going to manage it. Can you imagine the online infrastructure requirement in supermarkets beyond local baked beans and so on that they'd have to create to support it?
So actually it could be the value added for the specialists.
Rod Cousens is CEO of Codemasters. Interview by Phil Elliott.