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An Epic shift to games-as-a-service

Unreal maker's worldwide creative director Donald Mustard discusses how changing business models upend the way competition works

10 years ago, Epic Games was a very different company. The Unreal Engine side of its business was still primarily a AAA endeavor, with developers forking over millions of dollars for access to the technology. On the game development side, it was a one-project-at-a-time studio in the middle of a decade-long stretch of working exclusively on Unreal Tournament and Gears of War.

Things at Epic are very different today. The Unreal Engine business model has adapted to the consolidation of the AAA market and an upsurge of small developers, and is now available for free with a royalties-based revenue model. On the gaming side, Epic has expanded into mobile with the successful Infinity Blade series, cut ties with the Gears of War series by selling it to Microsoft, and lined up a portfolio of original intellectual properties spanning a wide range of new territory for the company, from the VR brawler Robo Recall to the PC and mobile tactical RPG Battle Breakers.

Overseeing the shift on the games side of the business is Epic's newly appointed worldwide creative director Donald Mustard, former creative director of Epic subsidiary and Infinity Blade creator Chair Entertainment. Speaking with GamesIndustry.biz at the Game Developers Conference last month, Mustard offered some insight into what changed.

"About five years ago, we came to the realization that the industry was showing signs of a massive shift away from traditional boxed products," Mustard said. "And we knew we wanted to be shifting before all that happened, so the last five years or so, we've really been transforming the company to much more of a focus on games-as-a-service and our engine-as-a-service."

The first fruit of that transition hit shelves last year with the launch of Paragon, a MOBA for PCs and consoles that puts more emphasis on action and twitch gaming skills than the genre-standard League of Legends. It arrived around the same time as two other high profile "hero shooters" at least partly inspired by MOBAs, Blizzard's Overwatch and Gearbox's Battleborn. Overwatch, as you're probably aware, turned out to be something of a phenomenon, powering Activision Blizzard to record results despite a disappointing year for Call of Duty and taking home DICE and Game Developers Choice Awards Game of the Year honors. But where massive hits of yesteryear like Call of Duty: Modern Warfare or World of Warcraft tended to blot out the sun for competing titles in their genres, Mustard said that hasn't been the case here.

"Paragon has been doing fantastic," he said. "We could not be more happy with the success of Paragon."

"We look at the success of League, and DOTA, and Overwatch, and instead of us saying, 'Oh no,' we say that's the most encouraging news we've ever heard"

Mustard even shared some numbers, noting that in early December the game had more than 600,000 monthly active players, but the release of the Monolith update has sparked continuous growth since then, with the game now boasting more than 850,000 monthly active players.

"We look at the success of League, and DOTA, and Overwatch, and instead of us saying, 'Oh no,' we say that's the most encouraging news we've ever heard," Mustard said. "Because what that shows us is massive interest in this genre of game, and it makes us more thrilled to be investing in that space. I don't want to overstate it, but I kind of feel like we're in this golden age of gaming because there's such a wide and deep audience of people that want to play video games. If you build a game for an audience, they will come, they will play it, they will love it, and they will stay. I couldn't be more happy with the success of Overwatch, because it just shows us that's a ripe genre to be in."

This is indicative of a shift in the industry as games-as-a-service has taken hold, Mustard said. Publishers don't necessarily need a dynamite launch and massive traction right out of the gate to find success anymore. By launching games, listening to the early feedback of the community, and then shaping them into the experience those players want, Epic believes it can build long-term hits.

"The more traditional way we've made games as an industry for the last 20 years or so was probably more like the movie industry," Mustard said. "You make a game. If it's successful, you make a sequel. If that's successful, you make another one. It seems like games-as-a-service, which is at least a large part of the market for the foreseeable future, is probably more akin to television, or at least our current thinking of TV. When someone makes a pilot or even the first season of a show, it's not [wipes hands] 'Well I sure hope that goes for 10 episodes and then we're done.' They're very much planning for a multi-year product that will gain an audience and hold an audience for a long time. And I think that's the way you need to design these games now. You're playing a much longer game of building an audience, retaining an audience, and delighting that audience over multiple years."

But just as the games-as-a-service model can lengthen the lifespan of Epic's games, it's doing the same for other publishers who have already embraced the approach. And developers are competing for players' time and money not just against the other games in the genre that launched around the same time, but against last year's big hits and the evergreen industry titans that date back even further.

"How many games can a person have in their head at a time? Is it one? Is it two? Is it one console game and a mobile game? What is that balance?"

"This is a new and unique challenge for the games industry," Mustard said. "Basically, how many games can a person have in their head at a time? Is it one? Is it two? Is it one console game and a mobile game? What is that balance? And I don't know that any of us have quite found that yet. Part of the future of competition is, 'Could you pull someone away from the current thing they're retaining in and pull them into what you're doing?'"

Mustard believes the key to solving that challenge will be offering something very different from what the established leaders in the field are doing.

"I'm super-deep into Destiny, as an example," Mustard said. "If I'm playing Destiny, and another game comes along that's like Destiny, I think that's actually less likely to pull me away from Destiny than a game that comes along that's very different. I'm probably more likely to get pulled away from Destiny by Red Dead Redemption than I am by another sci-fi Destiny-like shooter."

For Epic, that means offering what Mustard describes as "innovative, clarifying, design focused products" across a variety of genres. So even though he insists that Gears of War and Unreal Tournament shooters are "still in our bones," don't expect the company to ever lean on just one or two similar products in that way ever again.

"We just want to make great games that delight players in whatever genre we're pushing in," Mustard said. "But we don't want to be a company that is in any way pigeon-holed to a certain type of genre or style. We're much more diverse than that."

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Brendan Sinclair avatar

Brendan Sinclair

Managing Editor

Brendan joined GamesIndustry.biz in 2012. Based in Toronto, Ontario, he was previously senior news editor at GameSpot in the US.