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id Software's Todd Hollenshead and Tim Willits on Games for Windows, digital distribution and the studio's future.

Following on from last week's discussion, id Software CEO Todd Hollenshead and lead designer Tim Willits here talk about the difficulties of content creation, their belief in Microsoft's Games for Windows campaign and the realities of digital distribution.

With id Tech 5 starting to pick up momentum and the promise of a new IP waiting in the wings, there was also an opportunity to look at the future of the veteran PC developer and how attitudes are changing within the famous confines of Suite 666.

Q:GamesIndustry.biz: At GDC 2004, John Carmack said the cost of content production and asset production have reached a level where investment had to be ramped up to an unprecedented degree - just to keep pace with expectation. Have id's views on that changed?

Tim Willits: One of the great things about John is that he has a great ability to see the future more clearly than everyone else, and he is still correct. But one of the things that we at id have done to help alleviate that problem is we've invested and spent time in better tools, faster content generation. If you make the tools easier to use and more flexible, you can get the end product done.

Todd Hollenshead: In terms of the amount of human resource that we needed to apply to our project, it's increased on more of a linear rate, whereas the media that we actually put in the games - that content has actually increased at a geometric rate.

If we had to do that with employees, it would kill us. On Quake 2 the development staff was 12 people. Now we're at 38. So it's about triple, and that was ten years ago. But the amount of differences in the media that go into Quake 2 versus our current game are multiple orders of magnitude.

Q: What's your impression of Microsoft's Games for Windows campaign? Do you think they're just trying to flog Vista and they'll give up on it?

Tim Willits: No [laughs]. Microsoft sometimes gets a bad rep for being Microsoft. But they really do know how to write software. One of the great things about 360 games - it's the same with PS3 - is you send them for certification, they run it through the gamut of tests, they make sure that you adhere to all the things you need to, and then when the gamer gets it it's going to work.

So for Games for Windows you'll have a certification, it'll go through Vista, you'll have the correct ESRB ratings. So that works. You'll have good security, you'll have a link in with Xbox Live...

Some people say it's a little too Big-Brotherish, but it's a legitimate progression of making the PC feel more - not like a console, but like a closed system.

For us, if there's a way to link a Live account into your security for your game in a nice closed system, it would help reduce the piracy, which kills us, and is killing the industry. At least Microsoft is doing something, and I think that they're in a position to do it.

Q: So this is how the PC has to mature?

Tim Willits: I believe it will help us in the future. The whole system's young and Microsoft's made some mistakes, but they're fixing it.

As we move forward, if it can help prevent piracy, if it can help people connect together, if it can help things be more uniform, so when end users buy any PC game they know how to connect, they know how to search for games - I do think it will help the games industry, and it's just the way things are going to need to move.

Q: Another way things have moved on is with digital distribution. Valve is writing their own ticket effectively with Steam. Are you tempted to follow suit?

Todd Hollenshead: At this point, there's certainly no project underway to make a Steam competitor. There are some limitations with Steam distribution and especially if you think of exclusive digital distribution in today's market. Still the vast majority of games are bought at retail.

You may have an audience that buys the majority of their games online that numbers in a few hundred-thousand, but a potential audience that you're trying to sell to is in multiple millions, and so - and I don't know what the numbers are, but I think it's like 80 or 90 percent of even Valve's stuff ends up being sold through traditional retail stores.

Q: But there's a much bigger margin on stuff sold through digital distribution, surely?

Todd Hollenshead: Oh, absolutely. They don't have any cost of goods, you don't have to worry about returns, you don't have to worry about retail margin.

Q: So presumably there will be a tipping point? When do you think that kind of thing will become viable?

Todd Hollenshead: I think it's within ten years, but maybe not five. Anything that goes on beyond five years I think gets very cloudy, but fundamentally there's no good reason why games can't all be sold completely digitally.

There's no reason they have to be put on media, shipped into stores and stuff like that. I think that there is just a habit of that's how people like to buy games. I think the vast majority of consumers like to have something to hold in their hand...

The majority of music is still sold through record stores, even though it's far easier to download a song or buy an album over iTunes or any of the music

distributors than it is relative to the videogames. So I do see that as maybe a red herring for what the industry is like.

I think the videogame business won't jump ahead of that. I think it has to follow it just because file-sizes, and sophisticated software, and there's catalogues, and all these things are just easier to do from a musical standpoint.

You hear, 'Well, in the future all developers will sell directly to consumers.' I don't believe that's true. I think there are a lot of things that make that a statement that will not happen, regardless of digital distribution. The method by which people buy will change, but the whole industry model of publisher-developer-consumer - that I don't see changing.

If you want to go into it, there are a few high-level reasons, but number one is there's no funding mechanism without the publisher for the vast majority of developers.

Number two is that in addition to just developing the game, most don't have a cash war-chest to go out into the market, to build up QA departments. The business of selling games is in many respects still completely different to the business of actually making them.

Q: Where do you see id going to in the next five years?

Tim Willits: Well, hopefully we'll have a few games out in the next five years!

Todd Hollenshead: I don't know. That's probably a better question for Tim or John. Our ambition is to be a developer and to make great games. We really don't have a whole rule-the-world-with-an-iron-fist, take-over-all-the-videogame-business kind of thing. We really continue to see ourselves as a small business.

Tim Willits: We're a small team. We're under 40 [people]. We'll probably get a little bit bigger in the near future. And like I said earlier, taking a different approach with new IP and new technology - it's something new for us.

I installed a 360 controller on all the PCs, and if I see anyone at id testing our new game without the controller, I smack 'em in the back of the head. And it takes a long time because we've been so PC-focused. So for us it's a mental hurdle.

But we all have 360 dev-kits on our desks. We're buying the PS3 dev-kits, and we're getting everything set up. We're small, and we've always had tight focus, but we're expanding that focus across the platforms to build good, licensable technology.

We'll continue to take advantage of our old IPs, and hopefully we'll launch another successful IP. Hopefully soon.

Todd Hollenshead is CEO of id Software. Tim Willits is lead designer. Interview by Tom Bramwell.

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