After a series of lay offs and cost cutting measures Funcom is looking to the future, balancing the maintenance of its big subscription MMO The Secret World with new, more efficient projects like an official LEGO game. But does it regret launching what is widely regarded as the last of the big subscription MMOs?
We spoke to Ole Schreiner, CEO of Funcom about the company's past and present, and how it felt to take charge at such a pivotal time.
Q: Your recent financial report mentioned "more focused, systems-driven games" - how do they differ in development terms from something like The Secret World?
Ole Schreiner: Games such as 'Age of Conan' and 'The Secret World' are primarily content-driven games and building content can be time-consuming, especially at the quality level Funcom has always gone for. When making an MMO you're not just making a 10-15 hour concentrated experience, you're building a world that will hopefully keep players entertained for hundreds of hours. That's a lot of content. Building content for an MMO -- the world, the stories and the characters -- you need to involve a lot of people such as artists, world builders and gameplay designers in order to be able to stick with a reasonable production schedule.
Developing more focused, systems-driven games allow for a smaller team without necessarily compromising the game's commercial viability. It's just a different kind of game that requires a different development philosophy and design approach. What's important to keep in mind is that a systems-driven MMO is no less of an MMO than a content-driven one. Eve Online is the perfect example of a popular systems-driven MMO that has truly engaged its audience and shown great longevity. A solid systems-driven MMO has the potential to live longer and be an even more engaging experience than a content-driven one.
Q: If you were starting work on The Secret World today, would you still choose the subscription business model? Why?
Ole Schreiner: The Secret World was developed as a subscription-based game and the decisions made during planning and production was based on that business model. If we had designed The Secret World as a free-to-play offering we would have made some different decisions along the way, for example in terms of how the in-game store works and how our post-launch content plan would play out. We tried leaving our options open during development so that we could launch with a different model should we have decided during development that's what we wanted, but eventually we did settle on the subscription model and that's what informed much of the game's design.
That said we definitely have the tools to turn The Secret World into a free-to-play game - or even hybrid - should we decide to do that somewhere down the line. We did that with Age of Conan with significant success. We all know that trends and expectations in the gaming business, and perhaps particularly the MMO genre, is evolving quickly, and we're regularly re-evaluating our business model against the changing currents of the marketplace and our own player base as well. Not only in terms of The Secret World, but also our future games.
"We definitely have the tools to turn The Secret World into a free-to-play game - or even hybrid - should we decide to do that somewhere down the line"
Q: Is there still money to be made in big subscription MMOs?
Ole Schreiner: I believe there is a market for free-to-play, subscription and hybrid business models. What's most viable for your project depends on what sort of game you're trying to make, what your focus is and how you're going about putting it together. I do think that as that as free-to-play offerings keep raising the bar in terms of quality and longevity, it's becoming more and more difficult for subscription games to live up to player's expectations. If you're demanding a monthly fee from someone they obviously expect more value than they get from a similar free-to-play offering. There is no way getting around the fact that a growing number of gamers expect MMOs to be free-to-play, or at least buy-to-play (such as Guild Wars 2), so building a successful subscription-based MMO is becoming more challenging.
Q: You've made big commitments on content for The Secret World, how many subscribers does it need to stay profitable?
Ole Schreiner: After the recent re-structuring of our internal teams, The Secret World is now a profitable operation and we expect it to be so for the foreseeable future. That's also why we are committing to the ambitious post-launch update plan. Of course, operating in the MMO business means you have to stay adaptive and evaluate yourself, your community and your competition, so we can't rule out a change in direction somewhere down the line. But we're quite comfortable with where we are now and what we're providing our players.
Q:Metacritic was mentioned as a factor in the performance of Secret World - do you think the service is given too much power by the industry?
Ole Schreiner: Yes, we mentioned Metacritic, not as a factor of performance of The Secret World, but as one of many explanations of why The Secret World hasn't performed as well as we thought and believed it would. This is not a criticism against Metacritic itself, after all Metacritic is only an aggregator, but it an important source for information that gives consumers, the business and the press an immediate impression of what to expect from the game. The fact is that press feedback on The Secret World has been very divisive, ranging from several 90's all the way down to the lower end of the scale, and this has obviously impacted our Metascore negatively. A game like The Secret World, being a new brand intellectual property in a very competitive and changing landscape, it needs continuously and good press feedback to perform very well.
We are, however, very encouraged by the fact that user reviews are consistently very positive. On Metacritic our user rating is currently 8.3 and we're also enjoying an 8.2+ user score on MMORPG.com, so it's obvious that the game is resonating with its audience.
Q: You took the CEO role just as Secret World launched - have there been any challenges that come with taking on the role at such a pivotal time?
Ole Schreiner: Taking over the reins in the middle of launching one of the biggest massively multiplayer gaming projects ever, was undoubtedly a great challenge. The fact that we had to initiate a process for reducing operational costs just after launch didn't make it any easier, and I think that would have been difficult for any top-level manager, let alone someone who just took over the reins. Fortunately I'm surrounded by very talented people and we had a very healthy handover process from Trond Aas, the former CEO, to me. I've also been with the company for over 11 years, previously as chief operating officer, so I knew the people, I knew the company and I knew the business. I think coming from a different role in the same company and not from the outside made that process easier -- both for our employees and me.
Still, in many ways, I think the greatest challenges lies ahead. We have a spectacular MMO in The Secret World and the challenge now is bringing in more players and keep the game growing and evolving. We also have to adapt to a fast-changing business, and we have to find clever ways of using the resources that we have to realise the ambitious projects that we are so eager to bring to life. Despite the obvious challenges, I definitely think we're heading into a promising future for Funcom. We have a rock-solid proprietary technology that's in many ways beyond everything else in the business, especially in terms of MMO development, we have some of the brightest and most creative heads in gaming, and we're working on some incredibly exciting projects such as the upcoming LEGO Minifigures online game.
"We have a rock-solid proprietary technology that's in many ways beyond everything else in the business"
Q: You've made some job cuts as part of a cost-cutting initiative, how else will you reduce costs?
Ole Schreiner: We are of course also going through all our general and administrative expenses and reducing where it is possible. Going forward our strategy of building smaller more focused MMO makes it easier to stream line work processes and indirectly save cost that way. Smaller teams are also easier to administrate so in the future you will see a Funcom with less overhead cost investing relatively more in development.
Q: You've been with the company for 11 years, what have been the biggest changes you've seen, in the company and the industry, in that time?
Ole Schreiner: When I stared in Funcom back in 2001 a few months after Anarchy Online had launched Funcom was already a great company to work in. Over the years the biggest change has been the transition from being a one studio operation to a four studio operations over three continents and with twice as many employees with everything that involves. Over time there has been so many big milestones in the industry, and some are still continuing and affecting today's market. World of Warcraft's dominance affected MMO production for years and it still does.
Free-to-play models have been introduced and Anarchy Online actually introduced the first free-to-play model in a western MMO back in the mid 2000. In fact, Funcom has been a pioneer in the MMO business ever since Anarchy Online launched, not only in terms of the free-to-play model, but also digital distribution, dynamic in-game advertisement and more. Not to mention the many innovative MMO design decisions we've made, from the combat evolution in Age of Conan to the modern-day setting in The Secret World, or even Anarchy Online which was the first ever AAA sci-fi MMO ever to launch. I'm very proud of the fact that Funcom has been so instrumental in pushing the genre forward through the years.
And who would have thought that Facebook would become such a significant gaming platform when it was first introduced? Not to mention the dominance of gaming platforms where PC game sales got hit hard as the three big ones - Xbox 360, PS3 and WII - launched back in the 2000. Today we also see a huge increase in digital distribution where the trend is that we move away from physical sales over to more digital sales. There are probably many more changes I could have mentioned, and I'm sure the years to come will be incredibly exciting - not only for the MMO business - but for the gaming business as a whole.