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Red 5: Small studios "tired" of relying on publishers

Thu 26 Jan 2012 8:31am GMT / 3:31am EST / 12:31am PST
PublishingDevelopment

Mark Kern believes publishers are no longer meaningful to developers

Mark Kern, a veteran of Blizzard Entertainment and founder of Red 5 Studios, has questioned the utility of publishers to modern game developers.

In an interview with GamesIndustry.biz about the controversial SOPA and PIPA bills, Kern observes that the industry's larger companies - particularly major publishers - tended to be for the legislation, while the dissenting voices generally came from smaller, independent companies and consumers.

While both bills were ostensibly about the battle against piracy and the protection of IP, Kern believes that many of the company's supporting them were principally motivated by the need to control distribution.

"It's all about restricting and condensing the distribution channels to just a few official ones," Kern says of publishers' support for SOPA and PIPA.

Small studios are tired of being reliant on publishers - for distribution, for finance, for everything else. It doesn't have to be that way any more

"What you're seeing is a reaction to try and preserve the old business model, and so you've got big companies lining up on one side and a lot of small studios lining up on the other. Small studios are tired of being reliant on publishers - for distribution, for finance, for everything else. It doesn't have to be that way any more."

Companies like Red 5, Riot Games, Mojang and myriad others have established successful models that accept distribution as both ubiquitous and free - "this whole area of competition [the publishers] cannot control."

"I'll go ahead and say something controversial: I don't think publishers are meaningful any more for the developer. There's so many other ways to get out there, and you're going to have to find different ways to compete, but they can be just as valid."

Kern believes that publishers are "financially motivated" to reassert their control over distribution through legislation like SOPA and PIPA, but success stories like Riot Games raise important questions about their continuing relevance.

"[For] studios like Riot, they're free-to-play, they're online, they publish themselves. They're doing fantastically well, and they can do it with a game that costs a lot less than what the studios have to pay."

"When you sell a boxed game, it's like, 'Who can stuff more millions in marketing and in content into a $60, one-time purchase.'"

To read the full interview with Kern, in which he discusses the lingering threat of SOPA and PIPA and the formation of his lobby group The League For Gamers, click here.

19 Comments

Bruce Everiss Marketing Consultant

1,692 594 0.4
Publishers serve three functions:
1) Acting as a filter as to what gets to market. Sometimes this can be a good thing, sometimes not.
2) Finance. Yep, they are further up the value chain so have the funds to pay for games to actually be made.
3) Marketing. The most important. And the most under-rated by developers. Just look at all the trouble most indies are getting into on the Apple app store.

Now this happens to be much the same across all retail IP. Books, films, television, recorded music etc.
So if very many different industries have evolved to the same business model it must work.

Posted:2 years ago

#1
Publishers have a very valuable but under valued role when it comes to development of major titles. For the indie, it can be a lucky streak and good partnership. For certain startups, maybe publishers are not the right appraoch and maybe self publishing is more viable (especially if the dev is quite well established with the right biz contacts)

Posted:2 years ago

#2

Dave Herod Senior Programmer, Codemasters

528 788 1.5
@Bruce, that's absolutely right, but I think that's one of the reasons a lot of developers don't like and distrust publishers. As developers do rely on their publisher to market their game, then see their game neglected because the publisher has decided to plough all their marketing budget into one of their other projects from another developer, and then possibly blame the developer for poor sales and close them down, it's not difficult to see why developers would like to be in charge of their own destiny.

Posted:2 years ago

#3
Today publisher have to expand and become more accessible to small and indipendent software houses. That's why Steam is so successful like XBLA, PSN, Android Maket or AppStore (and that's the reason EA made Origin). Publishers are no useless, they only need to change to a wide distribution network model and become something more actual than the big company that eventually sell your game.

Posted:2 years ago

#4

Brian Smith Artist

196 85 0.4
Not out to get you Bruce but with your point 1, when is this a good thing. I just can't see it.

On 2, finance, it's just a fact of the model, they make the most cash and so have the capital.

On 3, I don't think developers under-rate the marketing at all. They don't have the finance.

Personally I see the current model with publishers as largely responsible for the industries imbalance in terms of quality. Large organisations can run with a model that yields dozens of titles a year where only a few rake in the profits. Overall large publishers can be profitable even when the majority of their projects fail. This is a fatal flaw of this relationship from the customers perspective.

Posted:2 years ago

#5

Dave Herod Senior Programmer, Codemasters

528 788 1.5
@Brian - No I think Bruce is right on the first point. You could be super enthusiastic about your game and the developer could be brutally honest and tell you no one would buy it because there just isn't a market for it. Would you want to waste a year or two of your life working on something that bombs when someone could have predicted that before you even started?

Posted:2 years ago

#6

Adam Campbell Associate Producer, Miniclip Ltd

1,184 979 0.8
They have a role, yet I think the middle man is becoming less prominent now there are other routes to getting products out.

Posted:2 years ago

#7

Alan Wilson Vice President, Tripwire Interactive

29 30 1.0
Which is we ended up cutting out the publishers and went to publishing our own games. Of course, now we have published a few other teams' games, I'm not sure what that makes us :) But most of that comes down to the ability to be able to fund the development int he first place - by hook or by crook.

Posted:2 years ago

#8

Brian Smith Artist

196 85 0.4
@Dave - I think the amount of AAA titles that bomb kind of blow away that argument. Large publishers have been known to miss the obvious and promote duds more than just a few times and that happens in music, movies and games alike. I admit that on occasion the experience of a publisher (and statistics they have access to) can stop a developer making something that won't sell but it's more about following the trend for them. Publishers hate risk and sometime risk produces great games.

Posted:2 years ago

#9

Frederic Eichinger Web Developer

33 27 0.8
That's more of an issue of the publishers themselves, rather than the model, Brian.
While I agree that publishers' judgement is quite far off these days ... and has been for quite a while ... I wouldn't call that a flaw caused by the system.

Nonetheless, publishers - as we have seen them in the past - became a non-factor with the Internet (except for financing larger titles, of course) and really need to focus on this middle-man wide-ranged distribution path.

Posted:2 years ago

#10

Paolo Davide Lumia Editor in Chief, MMORPGITALIA

3 1 0.3
Interview link broken

Posted:2 years ago

#11

Tony Kim investment analyst, artisan partners

1 0 0.0
Uhhh.....Riot was basically acquired by Tencent for $400M. They aren't independent. Also if publishing deals suck so bad, then why did Red5 do a deal with Webzen and The9. Because they need publishers especially in overseas markets like Korea and China.

Posted:2 years ago

#12

Ian Harper Managing Director, Future Games of London

1 0 0.0
Hi Mark, yup interesting article.
I wonder if i could trouble you to look at http://www.futuregamesnetwork.com and give us some feedback in light of your comments above?

Posted:2 years ago

#13

Julian Allen Concept Designer

1 0 0.0
@Brian Smith, well said and I agree whole heartedly.

Posted:2 years ago

#14

Tin Katavic Studying MSc-Games Technology, University of Abertay Dundee

44 3 0.1
As all I know about publishers and markets is from the classes I took so I can only ask and hope I didnt get thing wrong .... isnt one mayor problem that publishers get 70% of the profits while developers get 30% and that is after the publishers investment is payed off? (correct this if its wrong please)

As for Bruces 1,2,3 - in my humble laymans opinion ...
1) Filtering - sometimes an idea that seems silly can be great. Who would have predicted such a huge success for Cut the Rope or Angry Birds? I guess I would rather bomb out on a project I felt passionate about then bomb out on a project I was just told to do. As Bruce said - sometimes good, sometimes bad. Does it make it necessary?

2) Finances - sure, it probably is great to get payed to make a game (dont know as no one has paid me yet) but $$$ doesnt mean a great game. And then there is Minecraft ... yeah ... I am still baffeled by that one. :)

3) Marketing - Ok, I wont touch that one cause honestly I would probably say something stupid as I dont know much about it. Heck, I can hope I didnt say anything too stupid so far.

Posted:2 years ago

#15

Dave Herod Senior Programmer, Codemasters

528 788 1.5
@Brian - I never said publishers get it right all the time or even often, I meant like Bruce said, that's one of their purposes for existing, and if they did get it right it *could* be a good thing, theoretically. They obviously don't make the wrong call every time or none of them would still be in business. Also it's possibly oversimplifying things too say "miss the obvious and promote duds". You see the final product, possibly several years after the decision whether to finance a project was made, and a project can change a lot in that time, and developers can promise all sorts of wonders and not deliver. It's easy to look at a finished game with hindsight and say "that should never have been made", but every project is a huge gamble to even get to that point. Plus, games have a habit of going through development without much visible promise and then coming together extremely late in the polish stage, so getting to that point is all down to how much faith the publisher has in the developer to pull it off. That said, I do think publishers have too much power.

Posted:2 years ago

#16

Brian Smith Artist

196 85 0.4
@ Dave - I take your point that some developers can promise more than they can deliver although my few experiences on AAA titles have tended to be the opposite. Publishers often demand the moon on a stick even when their finance doesn't stretch that far. Then the developer struggles not just with additional wants but with their core design too. Don't get me wrong I don't think they are all worthless. Some can add real value, such as Rockstar in my experience. For most though, I'd be happy to see the back of them.

Posted:2 years ago

#17
Most Publishers aren't about quality, which is a big issue in the gaming industry right now.. Developers don't NEED Publishers, but they can USE them if they choose too.

As long as a Developer doesn't mind the fact that their company/game will take longer to get out there and make them money, they can do it alone. But there are things a Developer needs to make sure they do right... Make a great game - Always consider and respect their consumers, etc. Buying and playing a game is meant to be FUN, not an annoyance.

As a quick example... look at Cliff Harris of Positech Games.. he Develops his own games, he publishes his own games, he does his own tech support, etc... So, it's possible to do it without Publishers, even later once you grow large and prosperous from doing it the right way.

Most Publishers don't have the consumers interests at heart, they push the Developers too hard to get a game out for release with the attitude of "to heck with if it's ready or not", (which is NEVER a good move) because they just want it out there so THEY can make money fast.

Quality and Respect are key factors in truly being successful, but sadly those qualities have been lost over the years.

Well, that's my opinion anyway.

Edited 2 times. Last edit by Lisa Pham on 28th January 2012 1:42am

Posted:2 years ago

#18

Peter Stirling Software Engineer, Firelight Technologies

26 10 0.4
For all the claimed benefits of publishers, there is the underlying assumption that these roles would have to be done by the developer if not the publisher. They would have to be done by someone, but that would most likely be a third party. Competition and the free market would provide the best deal for developers to market and distribute THEIR intellectual property. Simple as that, publishers are overrated and antiquated.

The days of publishers running the show are numbered. The costs of distribution have reduced the point where that service is of no real value for any digitally distributed title. Now all they provide is marketing, well that can be bought as well, so really they provide nothing except capital. Well finiding capital is part of any business venture so in reality they no longer bring anything to the table.

This is true across most mediums. Publishers are just a relic of the past, but they wont go quietly.

Posted:2 years ago

#19

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