The End of Publishing
Digital distribution will change many things - but publishers will remain part of the landscape
The idea that publishers will become redundant in an age of digital distribution is a popular - and perhaps more notably, populist - one. Publishers are not, by their nature, attractive beasts. Where developers are seen as hives of creativity, the engines of creation which drive the gaming medium forward, publishers are easy to categorise as soulless creatures, faceless entities packed with accountants, marketers and executives. In a popularity contest between the suits and their spreadsheets, or the creative developers and their high concepts, there's no question as to whose side the public - and the media - will be on.
As such, when David Lau-Kee - himself a former Electronic Arts VP, a cynic might note - blasts publishers as "blood-sucking leeches" and talks about a digital future in which they will be rendered obsolete by the march of progress, it's a sentiment that developers feel pretty good about.
It helps that there's a strong sense of truth to his statements. Many publishers are guilty of being utterly domineering in their relationships with development studios, taking not only the lion's share of profits but also demanding that IP rights - the very lifeblood of a creative industry - be signed over.
Big publishers have been the gatekeepers to retail for years, with they alone holding the clout required to put a boxed game onto store shelves, and rather like the border guards of any banana republic, they have not behaved well with this power. Many developers, even very successful developers, will talk in public about how supportive and fantastic their present publisher is, only to reveal in private that they feel that the entire structure of publisher-developer relationships in the industry is fundamentally broken and heavily abused.
There is no question, too, but that the role of publishers will be diminished in the digital distribution era. Some of their major functions are essentially becoming obsolete - new retail channels are wide open, while warehousing and inventory have disappeared along with the physical products themselves. Physical production, packaging, distribution and sales are steadily disappearing from the publishing process.
Marketing, meanwhile, is not disappearing but is most certainly changing. The extraordinary and exponential rise in interpersonal communication which has been facilitated by parallel developments in areas such as social networking and mobile phones has been a broadside to traditional marketing - one which, frankly, very few marketers have come to grips with. Positive word of mouth buzz, spreading through mediums ranging from SMS messages to Facebook to Twitter, is driving sales more effectively than any above the line campaign ever could. Countless blogs and podcasts with a few hundred readers each are collectively reaching audiences wider than any magazine or major website.
Sometimes, clever marketing people can set of a spark which ignites that kind of coverage - but right now, it's more an art than a science, and the slightest hint of insincerity or PR guff can make a publisher's dip into "crowd marketing" backfire horribly. Yet, conversely, developers thrive in this market. They're the creative types, their enthusiasm for their game considered "real" and sincere by the audience who see publisher enthusiasm as fake, bottled and profit margin focused. That doesn't quite translate into indie games outselling FIFA - but it does translate into indie games probably selling more copies than they would if they had been picked up by a publisher at some point in the process and released with an EA or Activision logo on them.
However, let's temper this for a moment, and think about a few of the things that publishers do which aren't going to change in this brave new world. For a start, while marketing is paradoxically getting harder for the big guys and easier for the little guys, there's still incredible power in traditional campaigns, be they TV, radio, print, online or outdoor. Developers, as a rule, don't have the know-how to create those campaigns - or the financial muscle to support them.
Which brings us neatly to the question of finance. Of course, the model whereby the publisher pays for development up front is far from being the only model which works for game creation. Indeed, digital distribution opens up the exciting possibility of a long-tail model, whereby games continue generating decent revenue long after their release - so a studio with a few successful titles available can conceivably fund development on new projects with continuing revenue from back catalogue sales.
However, that won't work for everyone - and finance isn't just about where your money comes from. It's also about how you handle your money. Over the years, many developers have summed up their relationship with their publisher to me in the simplest of terms - "they're our bank" - but many others have understood that the publisher is, in effect, taking care of all the annoying financial stuff and letting the developers get on with what they do best, which is creating great games.
Other issues, too, would be new territory for developers to break into. Few developers have much experience of negotiating for licenses and IP to work on (there are many exceptions, of course, but it's certainly true that the majority of IP negotiations in the industry are carried out by or on behalf of publishers, not developers). Sales, too, would remain a factor to some extent - at the very least, someone needs to be cultivating the relationships required to get your products featured strongly on the portal pages of the various digital distribution platforms.
In a world without publishers, then, developers would need to either learn a whole raft of new skills in marketing, finance or elsewhere - or hire people who already have those skills, effectively turning every developer into a mini-publisher. Of course, rather than everyone hiring their own skilled staff, it might make more sense to have a company with all of those staff, who work on games created by many developers - at which point you have, essentially, reinvented the wheel and created a new publisher.
So, as appealing as David Lau-Kee's sentiments are, I think his case is a little overstated. Publishing is certainly going to change in the coming years - there is a storm on the horizon which is likely to break first in the music business, where the publishing giants really are becoming increasingly obsolete, but which will eventually reach videogames and will reshape the entire market. Some publishers will disappear. Some will shrink, in their range of functions if not in their actual size and turnover. Some developers will become publishers; some publishers will become developers, and strange hybrids between the two (such as Steam operators Valve) will appear.
But while digital distribution will change much, it will not remove all of the functions which publishers now serve, nor will it make the existence of publishers themselves entirely redundant. They may not win any popularity contests, but this industry needs its suits, just as it needs its creatives, and a role for publishing companies will remain even after the upheaval to come.