Roundtable: Gears in Motion

The GamesIndustry International staff reacts to the big sale of the Gears IP and what it means for both Microsoft and Epic Games

Just as Halo helped to establish the first Xbox as the console to own for shooter fans, it was Epic Games' Gears of War that set the tone for the Xbox 360 when it launched back in 2006. The game's gritty, impressive visuals combined with its (at the time) fresh gameplay and over-the-shoulder perspective made it an instant hit with hardcore gamers. The first Gears sold over 3 million units by January of 2007 and no doubt helped sell some 360 hardware.

In recent years, however, the excitement that surrounded Gears - especially since the release of Judgment - has seemed to wane. Judgment only managed to shift over a million copies, whereas its predecessors sold multiple millions. Has Gears jumped the shark? Can Microsoft and Vancouver's Black Tusk Studios reinvigorate the brand and give the IP a fresh start?

In the roundtable below, the GamesIndustry International staff discusses who got the better deal in the sale of the Gears IP and what Microsoft might do to make a last-gen property feel like a next-gen one.

Brendan Sinclair

Without knowing how much Microsoft paid for the Gears brand, it's difficult to know whether or not the Xbox One maker is coming out ahead here. But from Epic's perspective, this looks more clearly like a win to me. For some time now, I've looked at Epic's games as first and foremost an advertising platform for the company's technology. In the same way a console maker might use its exclusive first-party system-seller as a way to show everyone just what its new hardware can do, Epic used Gears of War and Infinity Blade to showcase the power of Unreal Engine, and quite successfully at that. But at this point, I don't think there's much benefit for Epic to keep pouring its own resources into the Gears of War franchise.

For one thing, Microsoft has said it will continue using Unreal Engine for its future Gears of War projects. And even though the series is being entrusted to a brand new studio, Microsoft has every reason in the world to ensure it lives up to the standard of its predecessors. Given the success 343 Industries had with Halo 4 after taking over for original series developer Bungie, Microsoft has also shown that it can shepherd a series from one studio to the next without losing too much in the transition.

If Epic decides it still needs a showpiece for Unreal Engine 4, it would be better served by creating a new intellectual property built specifically around what Unreal Engine 4 does well. While it may hurt to discard the consumer awareness of the Gears brand, such a title would almost certainly draw more attention among developers and publishers than another Gears of War game. And the possibility of launching such a title across multiple platforms might even produce a game that would outsell a fifth foray into Locust territory built for a just-launched system with a limited installed base.

Steve Peterson

Given the natural risk-avoidance behavior of major publishers investing in new AAA titles, a proven brand name like Gears of War seems like a good idea for Microsoft to grab. Yes, it was played out on the Xbox 360, but the move to a new console is a chance to completely rethink the game. The name recognition will draw potential buyers, and if the game can deliver some decent game play it should do better than Judgment did. Microsoft probably had some revival ideas pitched to them and felt there was a chance for a good game in there before writing the check.


Microsoft may also be looking long-term and thinking about having another system-exclusive franchise that can generate big numbers. Sure, they have Halo, which will no doubt continue well into the future and is probably going to be a key franchise for many years. But Titanfall is the title that everyone's excited about right now, and from hints dropped by EA it would seem Microsoft doesn't (yet) have rights to future versions of the game. Titanfall may well become a non-exclusive game in subsequent versions, which is good for EA but means Microsoft loses another exclusive -- hence, nailing down Gears of War to keep a known brand in the Microsoft camp.

The other side of the deal makes sense, too. Epic gets some cash, which can always be put to good use. They probably see better places to invest money and development resources than an exclusive console title. It's a good bet that being exclusive to the Xbox One would mean giving up at least half the potential sales of a new title that Epic could create (on PS4 and PC as well as Xbox One). Selling the IP to Microsoft makes good business sense for Epic.

James Brightman

I'm going to side with Brendan on this one. To me, this feels like a better deal for Epic. There isn't much risk involved. Studios get burnt out on IPs. Bungie was clearly tired of working on Halo after Halo, Insomniac was sick of Resistance, and you can bet that most of the team at Epic has had enough of Marcus Fenix, Dom and the Locust. Looking at Judgment's sales, I'd say that a good portion of Epic's own fan base feels the same way. The good news is that Epic can take what was no doubt a giant heap of cash and reinvest it into its bread-and-butter engine business as well as brand new IP to delight hardcore fans on all platforms. I wouldn't bet against Epic.

"It's entirely possible that Microsoft poached an aging superstar, the equivalent of an all-star athlete who still commands a high price because of past success but in reality has little left to give"

James Brightman

I definitely understand why Microsoft made the deal, and securing more exclusive IP for a console is always a good idea, but "doing better than Judgment did" isn't enough, Steve. The AAA business is brutal and the next Gears game will require substantial unit sales just to break even (see Tomb Raider, for example). It's entirely possible that Microsoft poached an aging superstar, the equivalent of an all-star athlete who still commands a high price because of past success but in reality has little left to give under his new contract. On the other hand, the more optimistic viewpoint is that Microsoft now has a real opportunity to reinvigorate a brand that could reap dividends for years to come. The word "transmedia" is used far too often, but Microsoft has pulled it off with Halo extensions, and that could very well be one avenue to generate more revenue from the IP.

As for the game itself, perhaps what Microsoft really needs to do is shake things up by altering the business model. How about episodic? Introduce new characters, make us actually care about these characters, and script some engaging chapters around these new heroes (or villains). Telltale's The Walking Dead series proved that this can work exceptionally well, but I believe it can be done on a grander scale. And with digital delivery becoming more and more common, digital episodes on Xbox One would allow Microsoft to bypass any associated retail cuts from its sales. If Black Tusk and Rod Fergusson are willing to experiment, episodic could potentially bring in far more money than a typical $60 SKU ever could.

Dan Pearson

I think this makes sense for both parties - and I wouldn't be too surprised if there's more than money involved in the deal. Fortnite, a game which Epic has been working on for three years at least, is currently listed as a Windows exclusive, with more platforms potentially in the works. It's not a huge stretch of the imagination to see that transform into Microsoft exclusivity. A slick, accessible multiplayer survival game, riding the Zeitgeist of games like DayZ, Rust and Minecraft might be an incredibly useful addition to the Xbox One stable, as well as being a perfect opportunity to utilise the company's much vaunted off-site processing mechanisms.

Whilst the deal might include finding Fortnite a home on MS platforms, the influence of Tencent, which owns just shy of half of the company's stock, seems unlikely to encourage a platform-exclusive future in the long term. That said, Tencent's bosses are smart enough to know not to fix something that's not broken, so the acquisitions here and in Riot Games might just represent nothing more than a canny investment -- plus, Unreal Engine games are a good ad for the tech on any and all platforms, exclusive or no.

I say that because Epic's games are generally shop window technology. From Unreal Tournament to Infinity Blade, Epic has forged plenty of platform-exclusive series in order to showcase its newest tech -- Gears was no exception to that, but as a 360 exclusive it still spawned a whole ream of titles on PS3 too. That job done, it makes perfect sense for them to cash in the brand and move on to the next project. Gears is likely past its peak as a franchise -- if Epic was ready to draw the curtains on it, Microsoft would certainly be the first phone call in search of a stay of execution.

As for what they'll do with it now, I think there a few options. Microsoft is very keen to make the most of the features it sees as its USPs - things, like Kinect and Cloud Compute, as well as dipping its toe into newer models like free-to-play -- I would certainly expect at least one of those things to feature heavily in the next iteration of the series. For me, the most likely of those is free-to-play. Straight-up multiplayer or endless horde mode would be a good fit and an easy quick win for the series, and something which would give MS some excellent metric feedback on microtransactions. A digital title definitely seems a lot more likely than a boxed product. Gears needs to see the light of day on the One within the next year or so if it wants to escape an enduring association with the last-gen. Assuming that the next title isn't already underway, that makes an online-only, digital title which can be tweaked and updated constantly all the more likely.

Matthew Handrahan

Without a cash sum to attach to this deal, it's virtually impossible to even take an educated guess at which party emerged with the most credibility. To be honest, I'm not sure that even matters, because the real question here is just what the Gears of War IP means in the context of the new console generation. It's all too easy to look at the performance of Gears of War: Judgment and declare that the franchise is already on the far side of its peak, but I'm holding out for more convincing evidence. I anticipated, played and enjoyed all three of Epic's Gears of War games and, to my eye, Judgment was not buoyed by the same tide of pervasive advertising and calculated coverage as its predecessors. Judgment was a better game than many will allow, but if it felt like an afterthought that's probably because it was.

"Console wars are fought and won on exclusive IP, and with this deal Microsoft has added a significant weapon to its arsenal... one that will probably be enough to persuade a few million more to put an Xbox One on their shopping list"

Matthew Handrahan

If the impressive Halo 4 is any indication, whatever Black Tusk eventually produces will be anything but another afterthought. The aggressively macho personality of the Gears of War series -- juxtaposed with the often pained sincerity in the second and third games -- has made it an easy target for mockery and even outright dismissal, but the hard fact is that Epic's series is among the most influential works to emerge from the last generation. Gears of War had a clear impact on the way action games functioned and felt from that point on, both in single-player and online. I reviewed the first Gears of War, and I made no secret of my admiration -- not for its script or its characters, but for its heft and its drive and the consideration evident in its design. Those who see Gears differently only think they know better, and there are somewhere around six million paying customers to champion its cause. To Microsoft, that's the only metric that will truly matter, and Epic's trilogy trailed only Halo and Forza in its popularity as an Xbox exclusive. Allowing the franchise to degrade at a company that may very well have more pressing business interests than keeping it alive and healthy would have been absurd.

Console wars are fought and won on exclusive IP, and with this deal Microsoft has added a significant weapon to its arsenal - one that consistently outpaced rival series like Uncharted and Resistance in terms of sales, and one that will probably be enough to persuade a few million more to put an Xbox One on their shopping list. After all, the first Gears of War on Xbox 360 was, for many, the moment that the "next generation" truly arrived. If Microsoft has any smarts, it will be seeking to recapture that feeling with whatever comes next.

Rachel Weber

What's that? Sorry, I can't hear you over the joyous whooping of Microsoft fan boys. They don't care that the IP has the slight odour of last-gen under its armpits, they don't really care who's developing it -- what they care about is shooting things with big guns and actually having something to play on their Xbox One. The new consoles need games, big AAA games, and Gears Of War will provide Microsoft with a marketing opportunity and a crowd pleaser all at once.

So it will sell, never mind what the critics say, nevermind who is at the helm. Not that the switch to Black Tusk Studios should be a concern; Rod Fergusson knows the series better than his own elbows. The man still identifies at @GearsViking on Twitter for pity's sake, it's not like you can question his dedication. If anything I'd argue that away from the responsibilities of being the brawny model strutting down the console runway in Epic's latest technology, the series could see a real reinvention. Forget about the Unreal Engine, come and check out my massive guns.

Microsoft has been smart, securing the future of one of its few true platform exclusives and making sure the next instalment will sell the Xbox One and its cloud and online features, not just Epic's impressive tech. As for the price? I reckon Mark Rein might just be able to afford another gold toilet this year.

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Latest comments (6)

Gregory Hommel writer 4 years ago
I can only speak for my experience here, but it is unique enough to be pertinent. I play games because of Sony. If not for the quality and value that Sony software provides, I would not be a gamer, much less care about weighing in on these news stories. However, I purchased an Xbox 360 for Gears Of War and spent more time playing it than any other game I have ever owned.

Whew! It was difficult to admit that. When Gears 2 came out, after a day one purchase, I immediately traded the game in and returned to Gears 1 with the majority of the Gears community, where we resided permanently and may still reside today. There is something to be said for that. I don't know what changed so much but I do know the resistance to Gears 2 was profound and lasted through subsequent Gears titles.

That makes the selling of this IP a big win for Epic. Nothing good would have come from another round of building a game in this universe. As for Microsoft... I am thoroughly enjoying the current slump they are experiencing. I kind of hope their missteps have done the Xbox sector in. Although the thought of a Gears game that recaptures that simple 4 on 4, raw, no respawn gameplay does make my right trigger finger twitch just a little. Enough to drop $600 on an Xbox One? You never know.

Edited 1 times. Last edit by Gregory Hommel on 28th January 2014 5:46pm

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Pete Thompson Editor 4 years ago
And here was me hoping that fanboy'ism had died a horrid death.. :(

Haters gonna hate, whilst gamer's are gonna game.. :)
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Axel Cushing Freelance Writer 4 years ago
I think that without knowing what was written on the price tag, the full impact of the deal will be hard to to fully quantify. That said, I don't imagine that the deal was acrimonious or overly one sided. Chances are it was a win-win for everybody involved. Unless Epic traded the franchise for a handful of glass beads, they could name a price that Microsoft not only could meet but would be happy to pay. For Microsoft's part, if Epic was gouging them, we'd probably be hearing stories about "valuable IP being held hostage."

The question now is: what do you do with the damn thing? Franchises have peaks and valleys, and it's probably worth letting the Xbone mature as a platform for a year or two longer before bringing out a new Gears game. If Black Tusk was working on the project before the deal was done (and on the premise that it would get done), that might be a problem if they're trying to avoid "franchise fatigue" but could certainly help them if they're feeling frisky and want to have a new Gears title ready for a holiday 2014 release. Hopefully, Black Tusk will take some time and brainstorm some new ideas instead of trying to slap together a quick-and-dirty title that kills the value of the IP.
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Gregory Hommel writer 4 years ago
You know, fanboyism is not without it's merits. My preference was created by products and services that I found to be of superior quality and value. Most importantly, you knew full well that fanboyism is alive and well. I try to keep my blatant preference for Sony off of these threads but I thought my love affair with Gears Of War was a testament to the power of the property.
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Paul Jace Merchandiser 4 years ago
To second, or fifth what others have said, without the price tag being disclosed theres no way of knowing who got "the better" deal but I'm fairly certain both walked away happily satisfied. Epic now has a few more millions for their beds of money to swim in and Microsoft now has another first party exclusive to sell systems.

Truth be told, I think this deal was a combination of a couple of things. First, Cliff, Rod and some other key Epic people left during the last two years. Had they stayed this deal might not have happened. And second, sales from the last game(which I have but have yet to play aside from the demo) may have persuaded Epic's current management that the franchise was losing steam. Regardless, both will come out winners but I think Microsoft will end up being the bigger winner over time if they can not only successfully relaunch the series with the new developer(ala Halo 4) but also, as James elluded to, position it as an even bigger transmedia series than it already is.

Beyond that, I don't see how anyone could think this was a bad move for either company. Microsoft spent money to make even more money in the future(and sell alot more systems) and Epic sold a multi-million selling franchise for more money to make future multi-million selling franchises. This is an absolute win-win situation.
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Nick Wofford Hobbyist 4 years ago
Yeah, it's an easy win-win. And I'm sure MS is loving that they've paid so much money to Epic, which ensures a really good business relationship.
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