The fast-talking 2K founder Christoph Hartmann, who still spends time in the production trenches, thinks server-based gaming is the future of the games industry.
2K is taking a bet on its potential with its early commitment to the OnLive platform, and here Hartmann discusses why 2K is betting on the cloud and the fate of Venom Games.
Q: What are folks saying at MI6 this year?
Christoph Hartmann: Everyone is talking about how to build communities, how marketing to Game Informer doesn't work anymore, and how everybody thinks we have to be on YouTube and Facebook. There is not one perfect answer. For every great example where it worked, there are another 2,000 companies where it didn't work. There is no magic bullet to solve the issue. It's a very segmented market from Wii to Flash-based games to hardcore gamers.
Q: Taking the shifting demographics into account, what do you predict will be the big bet for the future of gaming?
Christoph Hartmann: What we think the future will be is the market will shift to more server-based games - similar to the movie business where most people just rent instead of view films in the cinema. We're looking into that. But given that we're a boutique powerhouse and really only focus on one thing at a time, we're not going to do it like other big people and place five bets. We're going to pick the right opportunity and go after it. The whole market is shifting online and it's the direction that we want to take.
Q: What's 2K's involvement with the streaming game platform OnLive?
Christoph Hartmann: We have two games, MLB and Bioshock, that are going on OnLive, and I think it's a great idea. It will not be the only solution of that type that we will see. I'm sure there will be other players coming into that market and it's a great opportunity.
Q: What was it about OnLive's pitch that sold 2K on the platform?
Christoph Hartmann: First of all, there are a lot of people behind OnLive that have incredible track records - you're always betting on people to some degree, especially in the software world - and we felt also as the market is changing you have to give new people a chance. While we have to help in some form on the product development side, it's not like we have to put USD 20 million behind [the platform] and then design a completely new game. It's kind of a calculated bet we could take. We want to support people with new ideas that could take the industry in a different direction.
Q: Have you seen a live demo of the technology?
Christoph Hartmann: I have. It was two years ago in New York that I saw it running, and it was already impressive then. I'm not an engineer, so I can not run you through the technical hurdles. I'm sure they're going to overcome them. Many of the things people predicted weren't going to work, [OnLive] has overcome.
At the moment, it is the [service] that has the clearest concept of all of them when it comes to server-based gaming and really supporting mature content and any traditional big huge game. Technically, I can't judge it, but once they figure it out I'm sure other players will come into the market and it's unpredictable how many there will ultimately be. Overall it's the right step for our industry because it's what people want.
Q: Why were Bioshock and MLB picked for 2K's debut on OnLive?
Christoph Hartmann: It really had to do with picking strategic titles. Bioshock for us, on the Games division, is a premium title. We really wanted to test the bandwidth for a premium title and test what the maximum is you can reach from a product that we know really well. And MLB is the one where we have the biggest commitment because we have to spread it worldwide.
Q: Ken Levine has voiced his desire to more actively support the PC platform. Is 2K's commitment to OnLive a part of that? And what is 2K doing to promote PC gaming?
Christoph Hartmann: We always will be committed to the PC market. I can tell you simply why, the PC market, for me, is where you have a set of consumers who are digging deep into their titles and are very well informed. They definitely lean towards the core of the business. It's a good thing for a label like ours that tries to push the boundaries. We definitely want to be supportive.
Q: Is 2K investing in server-based gaming?
Christoph Hartmann: I wouldn't say investing because the next thing you'll ask me is what the dollar amount is and where it is, but we are looking into it. And as always, we are looking at if from a creative and technical side. We are a small label, but we want to put out big things.
Q: What about server-based gaming do you find compelling?
Christoph Hartmann: The advantage is it reaches a different generation - driven by people on Twitter, Facebook, short messages - that when it comes down to it seek instant reward and don't pay attention to anything longer than 5 nanoseconds, basically like my nine-month-old baby. They want to be pleased all over and whatever they have in their hand they throw away and don't remember.
Server-based gaming allows them to try out many more offerings in a short period of time and decide if they want to stick to something, and it also opens it up to turn it into a platform and get another layer of communication and build a kind of network.
Besides, the whole advantage is you don't have to go to the store to try it out. Maybe you can be per minute or pay per hour. Many opportunities.
Q: Are do any of the new wave of business models - like social games or virtual goods - that you find particularly appealing?
Christoph Hartmann: All of them are very interesting. This industry is really at the beginning of merging into an entirely different business. We know what the content is, and even how people treat the content. The Wii shows that there are other desires besides great graphics and deep gameplay. On top of that we have to learn how we can be better - I don't want to say maximise our profit from the consumer but it's about giving better offerings to the consumer.
As it is now, everything is about USD 50 or USD 60 and you get your 10 or 12 hours of gameplay. Maybe people don't like it. Maybe he pays USD 30 for 3 hours of gameplay and he says its good and fun. And then the model works better because I don't have to develop those 10 hours. But then there's maybe someone who is saying I'd rather have 25 hours of this game - and again server-based gaming would allow us to do those things.
Q: Analysts have predicted that publishers will be forced to split their attention between blockbusters and small downloadable games. What do you think the next few years have in store for publishers?
Christoph Hartmann: Let me talk about 2K. I think we're perfectly set up for the future. We're this boutique powerhouse. A fairly small label that still has a great output when you look at Bioshock, when you look at Carnival Games, when you look at our basketball games - I think we can compete as the David against the Goliath. How does it work? Because our DNA is very different. We have very lean management. Everyone is involved in the results.
I, as the president of the group, still go to the studios and sometimes function in a producer role and bounce ideas back and forth. That can sometimes lead to creative chaos, but I think that's the best way to adapt very quickly to market trends and try out new ideas. We're not going to be the one changing the industry by our new business models, but be the one who will bring new ideas to the table that bigger [publishers] will pick up and I think really that's the best set up.
Q: 2K recently dropped Cryptic Studios MMO Champions Online when the studio was acquired by Atari. It was going to be 2K Games' first published MMO title, so are you now on the hunt for a new MMO for the portfolio?
Christoph Hartmann: It's the same thing: When the right opportunity comes I either build it up internally and take my time, or there is some opportunistic thing out there. Champions Online was probably one of those [opportunities], but we probably didn't feel like investing in them at the speed they were looking for. While we thought they were great, as a third-party publisher-developer relationship it was not the sort of thing for us to go head over heels into.
Q: Right now MMOs is one of those markets that publishers seem to think they need to be a part of. How important is it for 2K to have an MMO and are you actively looking to pick up a developer?
Christoph Hartmann: It's not really that we say we have to have an MMO because everybody else has an MMO. I've been in the industry for 12 years and this is my third round of consoles. I've seen when everyone needed to have a female super hero like Lara Croft, then everyone wanted to do a Grand Theft Auto, and everyone just wants to do what's hot on the plate. But ultimately what is MMO - it is more or less server-based gaming.
If it's a Flash MMO, that's really something totally different, that really doesn't matter to us. It can come from an external and we can take it to the next level, or we can create it on our own. The days where you just go out and pick someone up are over because it's really the independent [studio] scene that is shrinking dramatically.
Q: 2K closed down Venom Games in the UK last year. Are there any plans to open another development studio in the UK?
Christoph Hartmann: I think the studios we have for 2K are really what we want to focus on. While I don't believe in a studio model of 1,000 people because that's against the philosophy and DNA of not having a layer of middle management. I don't think having studios of 30 to 40 people nowadays can survive. The perfect studio is between 100 and 200 people. Over that you have to change your whole management style, and that works against the philosophy we have. There are no plans to open up a studio in the UK.
Q: Why close Venom down? Is the UK too expensive?
Christoph Hartmann: The reason for Venom, really, was strategically it didn't fit any more. We have those studio hubs out in Novato, where we centralised studio locations from New York, we have a big Shanghai studio and 2k Czech, and Firaxis. They're our major studios we keep growing and nurturing, and after one project trying to add another one without having them turn into a factory. It was just very hard for us taking a studio that was on the small size and taking it to mid-size and bigger. It was too much for us to do at the same time.
Being European, I consider the UK the home of gaming and believe it will have a big comeback. What I believe was really disruptive to the development scene was the high Pound, and for most publishers being either European or North American it cost you extra money for nothing. That made it very difficult. Now that the Pound is coming back into balance with the rest of the world, I think it's an easy hurdle to overcome. There's an incredible amount of talent there - on the creative side, on the technical side, and in general. It just takes a little bit of time to restart.
Christoph Hartmann is the president and founder of 2K. Interview by Mary Jane Irwin.