Reverb: Solving The Publisher Problem
CEO Doug Kennedy on a new kind of publisher-developer relationship
The role of the publisher in the modern game business grows more precarious by the day. Companies that used to dominate the industry have begun to falter, a select few leap from success to success, yet the development community is diligently exploring ways of cutting publishers out of the picture altogether: Larian Studios has built its own channels into physical retail and brought marketing in-house; Double Fine is raising millions from its fans to fund an idea that few publishers would believe had market potential.
It's hard to know what all of this talk and possibly isolated incidents will mean in 10 years time, but developers' frustration at the aversion to risk and the influence of marketing and finance teams is impossible to ignore. According to Doug Kennedy, CEO of Reverb Publishing, the current model is "broken", and it's up to publishers to find ways to stay relevant to developers.
In this interview, Kennedy discusses Reverb's musical legacy, the unique challenges of digital publishing, putting developers in the spotlight, and bringing the million-selling Dungeon Defenders to market.
Q: Reverb has a long history in the games industry, but you're now expanding into digital publishing. Why make the switch? How will Reverb be different?
Doug Kennedy: We started as an agency about 10 years ago, and we were best known for working with two big IPs. I came out of the music business, and when I started the agency the first game that I wanted to take to client and work on, we came up with a little game called Guitar Hero.
We handled the worldwide sales, marketing and public relations for Guitar Hero 1 and 2 until the company was bought by Activision in 2007. After that, we stayed on board. We have a great love of partnering with developers, so we partnered up with Harmonix and signed a contract with MTV, and that's when we managed the Rock Band franchise. We worked on the three Rock Band games, Beatles, Green Day, AC/DC, Dance Central, and all the derivatives from the franchise.
In 2009, we started to see a lot of growth in the digital space, and we heard a lot of companies say that they were going to be digital publishers. We took a look at the digital space, and saw how the publishing community as a whole was really kind of stepping on the developers, and really not giving them their time in the sun. Up to that point, most digital publishers were marketing and PR publishers wo said, "You develop the game, and we'll support you by doing press releases and making sure your game gets attention.
The deals we cut with developers put the power in their hands. There isn't a single deal I've cut with a developer where I go after IP ownership
We took a different approach; upon deciding that we were going to move into the digital publishing space, we went to all the major platform-holders and secured our publishing licenses, secondly we went out and perused the industry and hired some of the best producers around, and then lastly we found some of the top-tier agency folks that really understood gaming. We're not talking about people that write press releases; we're talking about people that log 20 or 30 hours a week playing games.
That frees up the developers to focus 100 per cent of their efforts on building the best game. We manage everything from first-party relationships to making sure the press and media campaigns are in order.
Q: The digital space is occupied by a lot of independent developers, and they don't show much love for publishers and the publisher/developer relationship.
Doug Kennedy: It doesn't. It is a massively broken model, and what's broken is a couple of things: number one, you've got publishers that ultimately try and check developers, put them in the closet and say, "Look, we're the publisher, we're the most important people in the industry, you just hand your code through the door, and stop talking to press, and stop getting passionate about it." We take the opposite approach. These are the people with the vision to build these games, they should be mind-share leaders to go out into the marketplace and talk about them.
Secondly, the mind-set that these big, established publishers have when they take on a digital project to market, they think in terms of taking a retail product to market; that is, massive ramp in advance of a product launching, going towards a launch-date or a street-date, and once that street-date hits they redirect the team working on the project to work on something else. For us, when our game hits PSN or XBLA, we're only done 30 to 40 per cent of the work on the title. Most of work comes from DLC, new releases, community programmes, community blogs, and things that are going to drive attention for our games.
Q: Digital distribution has caused a huge rise in self-publishing in the indie sector. Loss of revenue aside, I think a big concern is handing a creative work, and often the IP rights, to a company that might not respect or understand it.
Doug Kennedy: That's the beauty of our model. The deals we cut with developers put the power in their hands. There isn't a single deal I've cut with a developer where I go after IP ownership. I want my developers to be building an IP library. And every deal I negotiate I pay the developer the lion's share of the money; our split pays the developers at least two thirds of the money on any deal that we do.
The reason being that if I have a developer that does not have any IP portfolio that he's built up, and doesn't have enough money coming into their company to pay a talented staff, he's worrying about managing his business; he's not worrying about building games. And I've got to have them worrying about building the best games in the marketplace.
Q: I recently talked to Swen Vincke at Larian, who is self-publishing his next game as a physical retail and digital release. He said that actually getting a physical product on to shelves wasn't that hard, but the positioning, marketing and messaging required more work. Is the value of that sort of expertise undervalued by indies who can easily self-distribute?
Doug Kennedy: Look, I think one of the real shames of this industry - and I've got my team doing this, and I hope that other companies look at this - taking a look backwards across the last five to seven years, there have been some terrific titles launched by independent developers that, because they didn't understand the public relations space, the marketing space, how to position the title properly to the consumer, great games ultimately never became successful.
Doug Kennedy: I say to iOS developers that they've tried to do something but there's just been this flood of shovel-ware to get above, and then you turn your attention to PSN and XBLA and you may launch your own game, but you don't have public relations and marketing support so the game fails. Well, now we find the development team wondering what to do next, and it's not that they're making bad games, it's that they lack the resources to take the game across the finish line.
There's four things that you need to be able to do when you launch a game: you need a good intellectual property, you have to choose the right distribution strategy, you need the right public relations, and the right marketing. If you have all four of those there's no guarantee that your game will succeed, but I guarantee that if you're missing one of those your game will fail.
Most developers can figure out the platforms they want to be on, and they know they can build the right game, but from a PR or marketing standpoint they fall down a little bit. And that's kind of why we're here... We know where we sit in the food chain. Developers are the most important people.
Q: It's easy to underestimate the importance of, say, Jon Blow to the success of Braid, Notch to Minecraft, and Team Meat to Super Meat Boy. They were excellent products, of course. but they had public-facing figureheads who helped generate interest.
Doug Kennedy: When we started this business we had trouble with the word "publisher", because it has such a negative connotation in the independent development community. In our conversations we try and veer away from saying publisher; we're a support mechanism for the development teams... They're shocked when they learn they get to keep the IP.
Q: Is that process going to get easier, particularly after the success of Dungeon Defenders?
Doug Kennedy: Success breeds success. The most difficult time for us was when we first started and we hadn't launched any titles. We have a long history with Trendy and the founders of Trendy, and now we have a million seller on our hands. They ultimately trusted our decisions, and we worked well with a team of really strong developers and were able to hit a million paid downloads.
I think Double Fine's Kickstarter is monumental for the independent development industry...and the kind of innovation the development community needs to keep going
Q: So how much difference did Reverb's contribution make to Dungeon Defenders' success?
Doug Kennedy: It would be unjust for me to take any credit. I've walked with Jeremy and the developers for almost eight years now, and people assume that I must be really surprised by all this [success]. I'm not at all.
Q: But a lot of really good indie games aren't successful at market. How do you get above the noise? The App Store is one thing, but Microsoft has also taken criticism for not doing enough to help its Indie Games channel, and for burying games altogether with the dashboard update.
Doug Kennedy: I'll use a music analogy. I'm not the musician; I'm the guy that makes sure the stage is put up, I make sure the advertising is out there, I make sure the radio stations have the plug about the concert, and we funnel the fans into the stadium. But at the end of the day, the developer is the performer. We give them the microphone and the audience to speak to.
Q: Has there been a change from the era that produced 'names' like Will Wright, Peter Molyneux, Hideo Kojima, Sid Meier, and so on? In terms of figurehead developers, the list hasn't changed much since then. Do publishers suppress that, and push it into the background?
Doug Kennedy: That's exactly the problem. Look at what happened with Activision and Harmonix; when Activision had rolled out Guitar Hero they wanted to slide Harmonix into the corner and bring in Neversoft to work on the next Guitar Hero. But Harmonix is based in the music genre... It's not just about playing interchange with any developer you want to put in. Developers have embedded cultures, embedded love for certain kind of games, and you have to let that come out.
Q: What Tim Schafer has accomplished through Kickstarter is significant to that, I think. Double Fine has been through some difficult periods, but retained its independence, retained an audience, and the result is over a million dollars of crowd-sourced funding in a couple of days.
Doug Kennedy: I think this is monumental for the independent development industry. You had Tim Schafer and Double Fine out there, but I also think you had a welling up of consumers and industry executives who are so tired of the "no, no, no" coming from the standard industry protocol of it has to be a franchise. Everybody's afraid of new IP, but Tim went out there and did it and now everybody's coming out of the woodwork and getting excited about it. I take my hat off to him - I think it's just amazing, and the kind of innovation the development community needs to keep going.
Q: Dungeon Defenders is available on PSN, XBLA and Steam. Where did you get the most success?
Doug Kennedy: Steam, far above any of the other platforms. We really respect our relationship with Sony and Microsoft and we'll continue to support those platforms as we move forward with the title. But with the Steam, how quickly they were able to move forwards with promotions, in terms of DLC drops, our numbers on Steam were, to be honest, staggering.
Q: How much of a problem is that for you? You mentioned earlier that only a third of the work is done when the game actually launches, but XBLA and PSN have greater restrictions on what you can do in terms of support.
Doug Kennedy: With the iOS, smartphone and Facebook markets the consumer has been conditioned to want continuous updates. It's not about just dropping a game and moving on to the next project; it's about maintaining a title, listening to your community, and finding ways to offer things that will continue to excite the base. The development team at Trendy has done an unbelievable job supporting this title, and that's something other developers can learn from.
Q: Do the platform holders recognise that as important for indie developers? Xbox Live, in particular, has been called out numerous times for how difficult updates and patching can be.
Doug Kennedy: The problem is that the platforms are run by big companies like Sony and Microsoft. Take a look at the economics of an XBLA or a PSN release versus disc-based releases, you've got a $7 to $8 royalty when you ship a disc-based game to market, and that goes to Sony or Microsoft, plus marketing and things like that.
Now take a look at an XBLA or PSN title that prices out and around $10 to $15 and they take their 30 per cent, it's a lot less money for them. So how important is that digital console space for them? It's left to be said. There's money to made there, but I don't think you'll ever see it flip-flop over what they do with disc-based products.