Xbox co-founder warns publishers may vanish

"Who knows if there'll be big publishers in the future? There don't have to be”

The impending arrival of a new console generation has been eventful, with rapidly changing Xbox One policies after a chilly initial reception from games media and consumers. This swift, responsive change was unlike the Microsoft of old. The [a] list daily sat down with Xbox project co-founder and Microsoft veteran Ed Fries recently to talk about where the game industry is headed, and what he thinks of Microsoft's swift policy changes.

"I was impressed," said Fries. "I was concerned that they wouldn't change, and I was impressed that they did change, and changed quickly. They clearly are responsive to feedback, and I think that's great." Just the fact of changing that quickly is a necessary thing in the market these days, Fries believes. "We all make products for customers, and it's important that we listen to our customers when they have things to say to us. It's a lot more true than it was in the old days. If you think about games, we used to spend three years making games and stick them in a box, and people liked them or they didn't like them."

"Now it's much more direct feedback from customers," Fries continued. "We test things a lot, see what's working and what isn't working and the launch is the beginning of the process. I'm talking more about free-to-play games now - you're basically developing it with your customers. We have a much more interactive relationship with our customers. If people aren't happy they let you know, and they can cause trouble for you. I think it's important for companies to be customer-focused and be known as companies that listen."

"Maybe it's just lots of small developers, getting together and then breaking up into little teams all over the world, that's where great games are going to come from"

Fries was surprised that Microsoft is allowing World of Tanks on the Xbox 360. "Yes, and the indie publishing announcement surprised me as well," Fries acknowledged. "I think, like a lot of people now, I'm waiting to see the details. I gave a talk last year about how the world of games is changing, and how it might be difficult for big parts of the industry to change along with it, for big publishers to change or for developers to change. I talked specifically about this issue, about free-to-play and about the barriers to consoles truly adopting free-to-play. I'm glad they're heading that way."

Adopting new business models is hard, and Fries understands the difficulties ahead. "The challenges with technology are often not guessing what the future's going to be and then building it, it's being in the right place at the right time with that technology," Fries pointed out. "It's very easy to be too early. You describe these as business issues, but maybe cultural is more to the point. It's hard for these companies to change. You see that all the time - it's the innovator's dilemma."

The future for the games industry is uncertain, and Fries sees the possibility of momentous changes. "Who knows if there'll be big publishers in the future? There don't have to be," Fries said. "Maybe the world of the future doesn't look like that. Maybe it's just lots of small developers, getting together and then breaking up into little teams all over the world, that's where great games are going to come from. Big publishers were formed because games were really expensive, there were big distribution issues. Walmart didn't want to deal with a hundred companies, they wanted to deal with four or five. A lot of those things changed with digital distribution. Maybe what we'll see in the future isn't like what we've seen in the past. What does that mean? There are winners and losers all through that."

Check out the complete article on our sister site, [a]list daily.

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Latest comments (10)

Paul Johnson Managing Director / Lead code monkey, Rubicon Development5 years ago
I hear this, their role certainly needs to shift for sure. Back in the day, they brought two things to the table, dev money and distribution. Practically no dev could provide either, let alone both, so they ruled with an iron fist.

Distribution is becoming a thing of the past though and for dev money there's KS or the old fashioned idea of putting past profits into future projects now devs can get all the money again.

They're not going to die overnight, but they do need to get some reimagining done about their usefulness and importance. We will soon be back to a place where the developer is king, like it always should've been.
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David Serrano Freelancer 5 years ago
I think when publishers inevitably lose control over project funding and supply chains, they'll devolve into marketing / consulting firms.
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Taylan Kay Game Designer / Programmer / Marketer 5 years ago
The flipside of this argument is whether indie devs are ready to take on the marketing and money managing functions of big publishers. Finances is not just about having easy access to money, it is also about being able to manage it effectively. With smaller games it might not be an issue, but Double Fine's inability to create a point-and-click adventure game for less than $3M is an indicator that not all of them might be ready to take the reins to big budgets. There is still a competency gap to overcome in that regard, although I'm optimistic that it will be closed eventually.
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Paul Johnson Managing Director / Lead code monkey, Rubicon Development5 years ago
That's a good point Taylan, most indies will fess up to being shit at marketing, I know we are.

Marketing and reach is still a big thing a proper publisher could/should do and would be the main reason to approach one. But whilst they're not generally in that mode, we're on our own.

There's probably a gap in the market here, a big name game publisher working more like a book publisher instead of a movie producer.
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James Ingrams Writer 5 years ago
There is a company out there with a template, that if it was copied, would save the games industry. That company is CD Projekt RED, developer of The Witcher series. The first Witcher cost under $6 million and went on to make $100 million in profits. This allowed them to sett up their internet retro games retail company, and supplied the funding for The Witcher 2, that cost $12 million! Anyone who has seen/played the Witcher 2, that on any level, it is a AAA product, but produced for 10% of the cost. Now add to that no DRM, a retail price point 20% less than other AAA titles from the large companies, and with that lower price, provides a printed map, art book and soundtrack CD!

To emphasis the success of this template, CD Projekt RED has just added another 20 man team and are now working on 4 titles!

If the EA and Activision's of this world could copy that template, or just get halfway there, the market would be in a much stronger place!

Do yourself a favour and go to You Tube to check out "Mars War Logs" and "E.Y.E. Divine Cybermancy" to show where sub $10 million development cost "indie" games are heading! You'll be surprised!

Edited 1 times. Last edit by James Ingrams on 7th August 2013 5:35pm

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Paul Johnson Managing Director / Lead code monkey, Rubicon Development5 years ago
Oh I dunno, I would expect a shitload of game for $10M. You should see what we've done for about 2% of that. I've never truly gotten how dev budgets can stretch into 9 figures. Not by any stretch of a mismanaged imagination. But that's a different argument... :)
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Carlos Bordeu Game Designer / Studio Co-Founder, ACE Team5 years ago

We just made a multiplatform (consoles and PC) first person action adventure with coop for waaaaay less than 10M. (Zeno Clash 2).

I really doubt E.Y.E's budget was anywhere near the 10M mark. I'd guess closer to ours. I'm sure many really impressive indie games are made for much less.

We made the first Zeno Clash for less than 200k. It is obviously not a representative case (startup indie game of a Chilean game developer). But you can get away with doing a lot for very little.

Edited 1 times. Last edit by Carlos Bordeu on 7th August 2013 7:30pm

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James Ingrams Writer 5 years ago
Congrats for Zeno Clash - excellent game. But E.Y.E. was worked on by 12 people for four years, so I am sure it cost more than $200k!

Also, I was using $10 million as an example of what can be done, but I did say "sub $10 million", meaning "under $10 million so I could include in one group games like the Witcher series and Mars War Logs and E.Y.E. That's my point, that there are plenty examples of quality games being produced for under $10 million, that even if that was the minimum the EA's etc would manage to get down to they could produce original, decent titles..

As good as Zeno Clash is, I wouldn't want to suggest we could have a industry making games for $200K; that wouldn't be feasible for corporations versus small groups that work from home. $10 million however is eminently suitable for decent "AAA" titles from the large publishers.
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Carlos Bordeu Game Designer / Studio Co-Founder, ACE Team5 years ago
Agreed. I didn't intend to imply 200k projects is a viable number for producing such games - it was just a rather extreme example of how low you can go when producing something of that scale.
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Bruce Everiss Marketing Consultant 5 years ago
The old cardboard and plastic publishers are vanishing, one by one. Really there aren't many left and there are a lot of big losses around. I can see several more vanishing.

A publisher serves 3 functions.

1) Curation. Deciding what IP reaches the market. Managing developers to make commercial product that will sell.
Now curation is done by the consumer. App stores have very low barriers to entry and contain hundreds of thousands of games. Most of which are vanity projects with zero customer demand.

2) Finance. When a game costs tens of millions (mostly just because it can) the finance has to come from somewhere. The publisher has sufficient critical mass to do this.
Now development cost is often zero. People working at home in their spare time using Unity.
Top end Unity/Marmalade/Construct2 development can be done for hundreds of thousands. Spend any more and you are infected with console development disease.
Between zero and hundreds of thousand there are lot of development business models. All of which can and have worked.

3) Marketing (including distribution).
Get rid of plastic and cardboard products and bricks and mortar retail and you take away much of the heavy lifting that publishers have previously done.
However the quality of marketing from most indies is abysmal. The "I will make what I like and the customers will come to me" attitude is self indulgent, arrogant and destined for failure 99% of the time.
Many indie successes are due to mere luck. Getting picked by Apple tweeted by a celebrity or catching the attention of the MSM.
Marketing shouldn't be down to luck.
Marketing is the area where there will be the biggest changes in game development and publishing in the coming years.
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