Toward the end of Jack Tretton's 19-year tenure with Sony Computer Entertainment America, the company had cultivated a reputation for being especially friendly to indie developers and was arguably reaping the rewards with a successful PlayStation 4 launch.
Four years later, Tretton wants to make some more mutually beneficial connections with indies. Speaking with GamesIndustry.biz this week, Tretton said that he has established an indie gaming fund called Interactive Gaming Ventures to help identify promising game developers that he can help fund, advise, and guide to market.
"We're not investing in the studio," Tretton explains. "We're not looking to acquire or own the studio. We will own a percentage of the IP based on the negotiated investment. But [there is] total alignment there. We all win and lose together and we're not dependent on anything other than a successful game for everybody to achieve their goals."
For much of Tretton's stint at SCEA, ownership of IP for an independent developer was a different proposition. It was more common for publishers to fund an independent game and take ownership of that studio's IP, with an eye toward turning it into a lucrative long-term franchise. But in the modern indie landscape, breakout hits in the indie scene aren't necessarily franchise propositions. Tretton expects the lion's share of IGV's return on its IP ownership to be realized within three years of funding.
"The hope is everybody enjoyed a very successful relationship and that initial investment leads to other projects and an ongoing relationship with us where they feel like they've got a good resource, both financially and from a management standpoint," he said.
"We're obviously looking for the runaway hit like everybody else. But we're looking to hit base hits more than we're looking to strike out nine times and then hit a home run on the 10th time"
IGV is looking to fund two to three "very targeted" projects a year, from teams that already have a profitable game or two on their resume, and maybe just need some management oversight, connections, and money to take their success to the next level.
This focus would seem to play to IGV's clearest strengths; its money is as green as anyone else's, and Tretton's management experience and Rolodex are not a source of debate.
He's also not the only one with industry credibility involved in IGV. Doug Kennedy, CEO of Ark: Survival Evolved developer Studio Wildcard and co-founder of PR firm Reverb Communications, is a managing partner in the endeavor.
"I think there's certainly an appreciation from my former colleagues at multiple software and hardware publishers out there that I've helped bring some stuff to them that has certainly made their business more successful," Tretton said. "It's worked out pretty well over the last four years, and I'm excited about this new venture because I've learned a lot, I've had success, and I think we're well-positioned to do it on a greater scale over the next five to seven years with this fund."
To put together the fund, Tretton sought out the help of bankers and private equity firms already familiar with the gaming industry and comfortable with non-traditional investments and looking for reliable returns.
"We didn't spend any time with the venture capital community because they want the long shots," Tretton said. "They want the latest and greatest, and they're fully prepared to have the vast majority of investments they make never pan out. They're looking for that exponential breakout hit that does 100-fold investment and makes up for the other 99 [projects] they didn't make a dime on. That isn't the model of our fund."
That means IGV might pass on the blockchain-enabled augmented reality esports powered by machine learning in favor of good games from good teams with a more traditional business model.
"If you have the talent and if you have the know-how, I think the opportunities for success are much greater today than at any point in the history of the industry"
"If you're a high-flying venture capital fund, you might characterize it is not having enough upside," Tretton said. "We love upside as much as the next guy, but we hate downside, so our fund is structured such that we don't expect to lose money on any of our projects, and we won't partner with anybody who we don't think has a potential for commercial success. We're obviously looking for the runaway hit like everybody else. But we're looking to hit base hits more than we're looking to strike out nine times and then hit a home run on the tenth time."
Of course, as many would be quick to point out, independent development isn't exactly a "safe" investment these days. But for all the concerns about visibility and discovery in a market with an unprecedented number of indie games releasing on a daily basis, Tretton sees as many reasons for optimism as pessimism.
"The indie marketplace is more established," Tretton said. "You've got more gamers that have been comfortable downloading games off the various stores and having enjoyable experiences. There are more consumers out there with an appetite to buy indie games. On the negative side, there are more games available and there's more clutter."
Whatever challenges the lowered barriers to the marketplace have created for indie developers today, Tretton said they're still far better off than they were in the days before digital distribution.
"If you have the talent and if you have the know-how, I think the opportunities for success are much greater today than at any point in the history of the industry," Tretton said. "That's really where we feel like the fund comes in, that we help tilt the scales in favor of the publishers we work with, bringing our relationships, our industry expertise, and bringing the financial investment that allows them to be more successful and raise their voice above the clutter. "