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When guarantees go wrong, developers get hurt

Razer's rescue of Ouya's devs highlights the need for much greater scrutiny of such schemes

The acquisition of Ouya's assets and core staff by gaming hardware firm Razer is pretty much the most positive ending that could have been anticipated for the ambitious but fatally flawed platform, which struggled in the marketplace from the outset despite its much-hyped and record-breaking Kickstarter pre-launch campaign. Razer hasn't picked up the Ouya console itself and won't continue to market or sell the hardware, but the fact that Ouya customers will be given a discounted route onto a new Android platform, while Ouya's staff will be retained by a new employer, is all good news.

Initially, it seemed that one significant negative was attached to the deal; indie developers who had signed up to create exclusive Ouya content and had not been paid for their work were to be left out in the cold, with Razer not picking up this tab along with the acquisition (a dodge possible due to Razer buying assets, not the company itself). That the financially weakest parties in this arrangement could end up being the most damaged by the final settlement would absolutely have left a bad taste; it's to the great credit of Razer CEO Min-Liang Tan that he quickly stepped in to create a new programme to accommodate the former Ouya developers with broadly similar terms on Razer's own Cortex platform.

That Ouya's story has ended on a high note for almost everyone involved shouldn't disguise the reality of what this series of events conveys; that the much-vaunted microconsole business, and perhaps even the entire notion of Android games running on TVs, Smart TVs included, remains an unproven and deeply risky field. For large companies who can take calculated risks with some of their capital, it's an interesting venture, but it's small developers who stand to lose their shirts - and well-intentioned saviours like Min-Liang Tan won't always be there to save the day. That this new field is risky isn't entirely surprising to anyone, I'd imagine, but the even more worrying subtext is that Ouya's seemingly well-intentioned plan to alleviate some of that risk turned out badly for its participants.

"It's not easy for developers to make the right choices about which platforms to support, after all. Platforms which are already successful are generally also very crowded"

It's not easy for developers to make the right choices about which platforms to support, after all. Platforms which are already successful are generally also very crowded, and suffer from huge problems with visibility that can only be solved reliably with marketing budgets far beyond the reach of a small developer; iOS and the Google Play store are good examples. Something new and unproven like Android TV or Smart TV platforms offers a chance to developers to get in on the ground floor and enjoy success in a relatively less crowded field. The downside is the attendant risk; if the platform doesn't take off, your investment in it can be for nothing. Some indies can afford to hedge their bets by supporting multiple platforms with multiple games; most cannot.

That's what made Ouya's Free The Games initiative look like such a positive and important development when it first appeared. Here was a new platform holder willing to put its money where its mouth was, inviting developers to create exclusive titles for the new platform, with a million dollar fund providing a guarantee of some income to offset a modest development budget. This scheme ought to have provided indies with the ability to take a punt on a promising new platform without taking the full weight of the financial risk involved onto themselves.

"The developers are blameless in this; when they signed up, there may have been rumblings about the riskiness of Android microconsoles, but Ouya as a company looked like a pretty safe bet for a partnership"

It didn't work, because Ouya didn't pay out. The developers are blameless in this; when they signed up, there may have been rumblings about the riskiness of Android microconsoles (the complete lack of security of the Ouya didn't bode well from the outset, let alone the broader questions about to whom, precisely, it appealed), but Ouya as a company looked like a pretty safe bet for a partnership. They had just raised $8.5 million from Kickstarter, were in the specialist press constantly, had hired a couple of high-profile figures; and the psychological importance of setting a number on the Free The Games fund, implying that a million bucks had actually been set aside to pay developers, should not be underestimated.

In the end, it would appear that this money was never set aside, or at least not in any sense beyond a casual earmark that could rapidly be rescinded. Vice reported that debts of between $5000 and $30000 remained unpaid to developers they spoke to in the programme; Polygon followed up with a report that only a quarter of Free The Games participants had been paid in full, with half never receiving any of the money they were promised. Far from alleviating the risks involved with creating a game on a new and untested platform, this scheme hid and thus exacerbated them. The guarantee of revenue to cover some costs distorted the decision space in which developers make choices about the platforms they will support; the failure to meet that guarantee therefore left developers, many of them intrinsically financially fragile, exposed to downsides they would not have undertaken without that false promise.

"it's worth pointing out that in this specific case Razer has pledged to make good on Ouya's promises to the best of its ability - but the general principle that's been established here remains damaging"

Again, it's worth pointing out that in this specific case Razer has pledged to make good on Ouya's promises to the best of its ability - but the general principle that's been established here remains damaging. Guarantees aimed at reducing risk for developers on new platforms are a powerful and useful tool which could, ideally, represent a very positive change to the risk and reward profiles of small developers. The downside is that if those schemes and the guarantees they offer cannot be trusted, they actually make the risk profiles even worse than before. Of course a developer needs to do a certain degree of due diligence on the company they're dealing with before entering into any such scheme - game development is a business and it carries with it such responsibilities - but again, in the case of Ouya, the company and its plan seemed solid and reliable. It's not as if Ouya's treatment of developers was an isolated incident; barely a month passes without hearing of another storefront, platform or scheme which has failed to meet financial obligations to small developers.

This becomes a major problem if it effectively results in developers being unable to trust such schemes and guarantees. It's not just a problem for developers, for whom the ability to improve their risk profile is a godsend; it's also a potentially huge problem for any company with platform holder or storefront ambitions, because if such schemes cannot be trusted, the inertia that leads developers to focus their energies on established platforms will be that much stronger. While I don't doubt that Razer's intentions in stepping in to support the developers left unpaid by Ouya are good, that's also important context to their actions; Razer wants to be a major player in the Android TV and Smart TV gaming market, should such a market ever take off, and it knows that getting the developer support it requires will need developers to be able to trust such schemes and guarantees. If Razer was seen, rightly or wrongly, to have screwed over developers at this point, it would harm its Android TV ambitions in future.

"One thing that would certainly help, though, would be for journalists and media outlets involved in reporting on these schemes to be much, much tougher in their interrogations of the companies which offer them"

There is no simple solution to this problem; developers' due diligence regarding the platform holders and storefronts they work with can only go so far; beyond basic contract law, no legal framework exists (nor would one necessarily be desirable) to police these arrangements and ensure that guarantees are cast-iron. One thing that would certainly help, though, would be for journalists and media outlets involved in reporting on these schemes to be much, much tougher in their interrogations of the companies which offer them. "We're establishing a million dollar fund" is not a statement that should be left to hang; how will the fund be provided for? Is the money in an account now, or does it rely upon future earnings? How will it be administered, and how will transparency and accountability be guaranteed? Is it actually a million dollar fund, or is a million dollars a theoretical cap, with a possibility or likelihood of far less being paid out?

All too often, a headline figure is quoted breathlessly by the media, a great PR win for the platform or storefront in question; yet the actual money paid out to the developers who need it is vastly, vastly less than that figure. It can seem churlish for journalists to probe too deeply around these schemes, which are often presented as though they were an act of charity towards indie developers - but such schemes exist primarily to benefit the companies who run them, not the developers they pay out to (or don't pay out to, in the worst cases), and as such, deserve to be thoroughly interrogated by a questioning media. Doing this is not a disservice or rudeness to the companies offering the scheme; it is a vital service to the developers who will throw themselves at the scheme's mercy.

It's great that Razer has chosen to support Ouya's developers by replacing the failed Free The Games scheme with a new one; but in future, when such things are announced, they must be met not with pessimism, per se, but certainly with careful interrogation (that goes for the newly announced Razer scheme too, incidentally). As the range of platforms and storefronts for games continues to diversify, this kind of funding will become more and more commonplace - developers need a way to distinguish genuine opportunities from PR posturing that won't live up to its promises, and only the professional media is in a position to help them to make those choices.

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Latest comments (9)

Jakub Mikyska CEO, Grip Digital2 years ago
I just don't understand who in their right state of mind ever believed that Ouya, or any other Android microconsole can stay afloat. Basically combining the disadvantages of consoles (the need to be stationary, connected to a TV, with a dedicated hardware) with the disadvantages of mobile platforms (security, mostly casual games crafted for quick sessions on an under-powered device), with added extra in the form of dated hardware and the huge up-hill battle of getting the consoles to the critical amount of households to create a market...

Who was going to use it? Mobile games fans? No... they have tablets and can actually move to kitchen while playing. The hardcore crowd? No, they have consoles and PC that play better games.
No one has ever launched a successful console platform without a billion dollars in their pocket to make that happen and a laser-focus on an audience that is going to make the platform fly in its first year or two.

I remember making exactly this kind of arguments against Ouya when it was still "hot" here and I was marked to be backwards-thinking and not seeing where the market is heading...
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Anthony Gowland Consulting F2P Game Designer, Ant Workshop2 years ago
Razer has pledged to make good on Ouya's promises to the best of its ability
Well, not really. They have the ability to make the same "we'll pay you for timed exclusivity" deal, but what they've done is much closer to a traditional advance on sales offset against a number of free copies of the game. Which is potentially a problem because Nexus isn't a platform, it's a marketplace, so there's nothing really stopping Razor from releasing it on Android phones and making devs essentially compete against their own free copies.
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Barrie Tingle Live Producer, Maxis2 years ago
I was actually on board to back Ouya when it hit Kickstarter but the more I learned the more I realised it just didn't make sense so withdrew my pledge (not that it hurt them).
Really it came down to the same things Jakub mentioned, Android consoles have no real market especially at the specs being touted. It was really just a mobile phone you connected to your TV, which you can do with new TV's and cheaper devices now anyway.

I personally see the Comcast games feature on the X1 as a similar niche, what are essentially mobile games going through a Comcast set top box. It makes a bit more sense than Ouya because some people still get set top boxes from their ISP even though an Internet connection and a PC/Console gets you all the TV you ever need anyway.
But still, get a Chrome Cast and buy the mobile games for your mobile and you can do the same thing with no monthly subscription for a cable TV service.
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Show all comments (9)
James Berg Games User Researcher, EA Canada2 years ago
@Anthony They've already been paid for those free copies, so it's not really competition.
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Sean Kauppinen Founder & CEO, IDEA2 years ago
This was a disaster from the start. It was great that OUYA became the darling of the indie crowd, but there was no commercial viability to the platform, marketplace, or games there. Developing a game for Ouya became a badge of indie credibility. To most independent game developers (those driven to make games as a business, rather than as a hobby), there was no reason to develop for it and the focus was put on platforms with a large audience and established track record. Ouya was never viable and anyone that believed it was, should go back and explore why it failed. Not enough money, not a market need, not anyone onboard that had launched a console before, etc.

It's great that Razer is stepping in to help the indies that bought into this pipe dream. I hope they learn from this situation and realize that this is a business and when Ouya fantastically failed (not as wonderfully as Gizmondo or N-Gage), it is really the opportunity to take this experience and realize companies go bankrupt and you shouldn't bank your entire future on some mythical unicorn pegasus that the market doesn't actually want or need, just because you want it to be true.
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James Coote Independent Game Developer 2 years ago
It's easy to snipe from the sidelines "It'll never work", especially in hindsight. Clearly the concept is not flawed if FireTV is anything to go by.

The wider point is that not all such things are the opportunities they seem on the surface. You need be already working on the right game at the right time.

The other issue is " innovation ". Most gamedev are actually pretty conservative, which helps reduce the number of candidates for these schemes. But conversely makes that holy grail of finding a "killer app" that much harder for platform holders
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Adam Campbell Game Production Manager, Azoomee2 years ago
Actually, I'll bring in the opposite view and say I still believe the micro-console is a viable platform, Android or otherwise. Ouya was the initial excitement and proof of concept, but lacked the marketing power and financial weight of bigger players.

Once we get past the 'phone games on TV' mentality, there is room for low cost, open platform media boxes for the living room, with a gaming capability. I think its only a matter of time before they take off in a bigger way, only its more likely to have Apple or Google on it than Ouya.

There's also a huge opportunity in China, where big TV and mobile companies are moving further and further into the living room with their devices too.
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Chris Payne Managing Director & Founder, Quantum Soup Studios2 years ago
The killer feature of Ouya that got it so much attention was the openness of the platform. It was launched before Greenlight, and well before PS4 and XboxOne's (eventual) accomodation of small devs. The big draw for developers was to get your game on a TV, and I backed it on the basis that it would encourage small indies making interesting, experimental games.

Unfortunately I was wrong. The sort of games I was hoping to see (stuff like Gone Home, Papers Please, Starseed Pilgrim or This War Of Mine) have failed to materialise, and the majority of the Ouya library is fairly typical arcade shooters and platformers. Which is understandable, because those genres are known to work well on low-powered hardware. And some are very polished indeed...Towerfall and Ittle Dew are excellent. But there's a lot less innovation than I expected.

Ouya handed out store vouchers a year or two back to try to get users spending. I still haven't spent mine, because I haven't seen anything I really want to play. Please correct me if I'm missing a classic!
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James Podesta Programmer 2 years ago
I just don't understand why ANY consumer would want one. People who "buy" games to play on the TV generally have a PS4/XBone or WiiU. There's no way an underpowered console will compete. Nintendo has enough problems each generation getting a foothold even with its massive pedigree and list of exclusive AAA titles, because its machines are a generation underpowered. Even valve with its milions of signed subscribers is going to have trouble getting traction on the SteamOS...

The second nail in the coffin was that XBOne and PS4 became a lot indie friendlier this time around... so anyone with a half decent game doesn't have that much trouble getting it onto the platform now.
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