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"With $6m, you can compete with Call of Duty"

Devcom panel discusses the opportunities for smaller studios in the AAA market

Competing with the biggest blockbusters on the market might not be as costly or difficult as studios think, if they're willing to take the risk.

That's according to a panel of developers at the Devcom conference in Cologne, which explored the future of the AAA market and the possibilities it offers to smaller companies.

The conversation was largely dominated by Daniel Vavra, co-founder of Warhorse Studios and former designer for the Mafia games, who expressed confusion as to why the many studios with a smash hit on their hands don't attempt to compete with the market's biggest franchises.

"[Lots of studios] have been extremely successful on Steam, they've made tens of millions of dollars - some of them maybe hundreds of millions - so [I thought] those guys will be the next publishers, or that when they have money they won't do garage games with ten people, they will probably upgrade to a proper studio and make proper AAA titles," he said. "But they don't, or at least I don't know any of them [that have]."

"In mobile games, you have to compete with hundreds of thousands of games. In the AAA market, you have to compete with 20 games per year"

Daniel Vavra, Warhorse Studios

He posited that the teams behind titles like Ark: Survival Evolved "probably have lots and lots of money, but they don't make the type of games I would like [or expect]". Clarifying, he explained that you don't see many independent studios working on big single-player titles that would follow in the vein of Assassin's Creed, Call of Duty or Skyrim.

"The indies who have money don't do those games - I don't know why," he said.

"It could be risk," suggested Adam Isgreen, creative director a Microsoft. "Growing a studio or having more people involved in a project is always going to be a risk. You could easily take all that money, the profit that you made, and it could just be gone based on trying to do a big game."

Vavra countered that if a studio makes $100m with a major hit, they could easily invest $20 million into a AAA-style product and still have $80 million left over.

Isgreen responded: "But you're in the industry, so you know how carried away we can get when you're making a game: making it bigger, adding in more stuff - and then suddenly you're like, 'where did all the money go?' Time can get away from us too."

Vavra pointed to strong sales of the current console generation, plus the rising consumer attendance of events such as this week's Gamescom, as proof that there's appetite for AAA experiences.

"Gamescom is not a showcase of indie games - it's mostly big AAA games," he said. "So there is interest from people, but the production decreased. This is the weird thing.

"Everybody is producing mobile games, but there are very few actual AAA blockbusters every year and they sell pretty well, so there's a big business opportunity in my opinion. I don't know why no one is taking that opportunity. It's bizarre.

"The chance of succeeding is better. In mobile games, you have to compete with hundreds of thousands of games. In the AAA market, you have to compete with 20 games per year. So there's a chance of failure, but it's not 1 to 100,000, it's more like 1 to 5 or 1 to 10 or something.

"It's risky. You will waste more money because the game's more expensive, but the chance of recouping the money is also quite big."

Isgreen observed that standing toe-to-toe with those titles would require "huge steps."

"I agree, yeah you're only competing with five games, [but] the amount of money you're spending just to get into that club is huge," he said. "You can understand why they might do fewer [titles] just to negate the risk. Because of the expense, even just marketing alone, right? Part of AAA has to do with how much money you're spending on marketing, rather than it just being about development of the title."

Eugen Harton, lead producer at Bohemia Interactive, noted that instead of venturing into AAA, a lot of new and smaller studios are opting for service-based titles - a safer and potentially more profitable business model.

"There's a lack of tools that enable that data-driven development in classic AAA. You're basically banking on that first week, for the most part."

Eugen Harton, Bohemia Interactive

"When you look at all that's happening right now, you want to have a long tail," he said. "You don't want to have a spike in sales but have a steady income that can be data-driven. There's a lack of tools that enable that data-driven development in classic AAA. You're basically banking on that first week, for the most part."

The conversation touched on whether or not AAA development requires a proprietary engine in an age when Unreal and Unity as so readily available. Techland's head of technology Pawel Rohleder was a staunch proponent for making your own engine. Isgreen agreed, adding that developers have a lot more freedom with their own tech, providing they have the time and talent to invest in it.

However, Isgreen did also recognise there are plenty of successful triple-A games within Microsoft's portfolio or on its consoles that use third-party engines. He cited the Unreal-powered Gears of War as an example - although obviously the franchise was originally developed by Epic Games, the company that actually builds Unreal.

VR also entered the discussion, with Isgreen noting that even the leading virtual reality platforms are unlikely to see a AAA game "until the install base is there". Rohleder notes that a lot of AAA experiences do not lend themselves particularly well to virtual reality.

"It's a great experience for a short period of time, but I can't imagine playing a game for 10 hours in VR - that would be insane," he said.

"It depends on what kind of product you're working on. For Dying Light, which is very fast-paced with lots of movement and jumping around buildings, VR is just not right so we're not looking into that right now. We're doing some experiments and valuations, but we're not thinking about VR as a lead platform at all."

Later on, Vavra recognised that some studios might think it's too expensive to make AAA games but stressed that with the right tools and the right focus, those costs can be reduced significantly.

He cited CD Projekt Red, which has said the combined development and marketing budget for The Witcher III was $81m, before hinting that his own company's title - crowdfunded medieval adventure Kingdom Come: Deliverance - had cost less than $10m but aims to satisfy the same audience.

"You can do AAA games [for much less] nowadays. If I were making a first-person shooter... $5m to $6m and I can compete with Call of Duty," he said. "If you add $50m for marketing, of course."

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