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Risa Cohen offers her thoughts on the future financing of the games industry.

Continuing our series of interviews in the run-up to GDC Lyon, this time we talk to Risa Cohen, and independent producer who has worked on both videogames and film production.

Her talk at GDC Lyon in entitled "Zen and the Art of Production Management" and here she gives her thoughts on the future of financing in the games industry.


Why is Lyon GDC a good event?

The idea of having a first event like this in France is the chance for whole teams here to have access to experienced international talent, who'll be speaking about the hot topics for them that have been challenges and they have solutions to.

I think that the GDC San Francisco event has brought in international talent to visit, but predominantly it's American speakers, so this gives it the opportunity to mix it up a bit.

There are lots of things I'm looking forward to [at GDC Lyon]. I'm looking forward to hearing Matt Costello talk about scenario writing, and how that works inside of the game design structure and I'm also looking forward to the panel on AI, I think that's such a key topic for next-gen - the smartness of games.

For developers coming to the event, something that will be fantastic for them is to see possible solutions to problems they're having, but also just to look at how they're working and seeing if it's the smartest way to work.

Because we're a resource-driven industry, it has all to do with man-months and people behind computers. It's not like live action feature film, where you film in six weeks and after that it's mostly about post-production and edit. We have a little bit of that, but it's more about planning people.

Is that what you'll be talking about in Lyon?

Yes. The thing is, in game development, what I've seen is that through the production process, and pre-production, maybe you don't have enough time to do it and you don't really think it through - when crisis hits, maybe the publisher wants to make changes, you have a hard time focusing on what's important, which is making the best game.

Like everything in life you have to look at the details, but for me the management of a project does not have to be stressful. It's all about problems and solutions, the people who will be fixing the problems, and how to spot them ahead of time - to identify risk.

The pressures on development teams now, with the rising cost of next-gen production are more extreme now than they're ever been.

Absolutely. The fact that the cost of development is rising, you man-months are more expensive, you've got more people working - that means that when you've made a decision and throw something out you've thrown away a month, maybe two, and then you have to catch up, which you can almost never do.

So that means cutting something, and you end up getting lower quality, and not the best use of your budget.

In retrospect, if you look at the rising cost, now it's true that the value of what you get is really how well you use your team, how well you think your design through. It relates to similar industries like architecture, where you have to decide on what materials you're going to use, where you're going to put your money, which features are really worth it, which are secondary.

I often use the term 'production value' when looking at the high cost of production today - that's where we get close to film. You need to look at how much bang for your buck will you get, how much will the audience appreciate what you're putting into a specific element.

Whether it's cinematics, animation, graphics, AI - and then you balance that with how much time it's going to take, is it worth all that risk?

In games we don't have to fit into 70 minutes, we don't have that squeeze mode. You want to make it rich and big, and so the logic of throwing stuff away should really be in pre-production to limit the chain reaction that effect has on the whole production.

What are your thoughts on outsourcing - is it good if managed well?

Oh yes, there are certain things that you can't outsource, that you need to hold control of as a developer because it's just too difficult to communicate, or maybe you don't have the key people to manage that.

But outsourcing to raise your production value is key. For example when you look at your team, and see where its strengths are, look at where you can raise the quality of the game at the end of the day.

Does it mean getting in someone who's going to do your film elements, your cinematics, is it someone who's going to storyboard, are they going to work on the cameras in-game, because you might have a very technical team.

The idea of growing a team for a project is high risk because integrating them, training them on your tools, your company culture, it's maybe not beneficial to the game.

So I think that outsourcing comes with a logic similar to film - every film is like a company in itself, a production in itself, and you do everything you can to make that as strong as possible.

So if it means that your company doesn't have the skills for 2D animation or motion-capture, rather than buying a mo-cap system and thinking of it as a good investment, that kind of logic isn't really putting the production value first.

Get in an expert who knows motion-capture, outsource it, have them give it you in a deliverable format. But then, yes, you need to have someone inside your team who is trained to manage that. So it means having more managers, people who are capable of managing other teams that are not in front of them to deliver the quality you're expecting.

There are some dangers though?

Oh absolutely. I'd say that if you've never outsourced, my recommendation would be to start with a company that's local, not to try and cross the barriers of language and time zone. Try and work local first.

See what it's like to sit around a table with somebody else who's managing the team - do you know how to ask the right questions, will you give them the right information so they can give you better then imagined work, rather than something that doesn't fit.

So start off local, and then if you want to expand offshore, to save money by outsourcing to others countries, then yes - you might get things cheaper in Asia, but if you've never done it before it might be worth trying local first.

From the perspective of somebody who's worked in both film and games, what are your thoughts on subsidies?

I think there these are separate issues. Yes, videogames are culture, and there should be systems that allow them to match the alternative financing that's available to film and television.

There are solutions that aren't always related to subsidy. For example, I've worked for quite a few years now with completion bond companies - it's a financial model used mostly in film, and has branched into the games industry.

Basically it's a structure that was put in place to guarantee the that a film would finish on a certain date so they could get independent financing based on presales on delivery of the completed film. This system is used for financing independent films, so any film that's not studio made (they have their own funding, they'll make it, no problem).

However, when somebody wanted to make an independent film, historically in the fifties a producer would have to go out and get independent investors, put up their house up as collateral to get money from the bank, provisionally, to shoot their film.

They would have distribution companies like Pathe or United Artists that once the film was finished would pay a lump sum to distribute it. So the producer took it upon himself to make the film, and when they got it in on time and he didn't go over budget, they give him the money.

However, if he ever went over budget - for example it didn't stop raining, and he was supposed to film outdoors, or they built the sets and they just didn't work, or the director was very picky and he could never finalise the shot - and the film was late, suddenly the distribution didn't want it.

So then he has to go out shopping his film, he has to raise more money, and it became a big, dangerous financial disaster.

So what happened was that some companies, like financiers, came into the completion bond industry and they proposed on-time-on-budget insurance. That insurance enabled the producer to get a loan against the presales.

So when Sony Pictures would agree to pay 1 million to distribute and your film is going to cost 1 million, and the English government says that they're going to give you sales lease-back money - or other models they have that advance funds they will get back - and maybe Barclays will complement it.

All this money will come together and form the budget for the film, and the producer will become a three-way party - and that's done for videogames now.

So for example, if I have a developer who has a game, I have a publisher who wants to distribute the game, you can sign an insurance policy that the game will be delivered on time at a certain budget.

So that means that the money is coming from an outside source. It could be from government, allowing tax money investment, but they advance the money, and then get back the money when the game finishes on time and on budget.

The insurance company guarantees that it will be on time, makes sure the right questions are asked, what are the right decisions to make, do we have the right people - those kinds of questions.

It's already happening, and that's really the future for me, having a more stable financial environment.

It's not a very straightforward situation, is it?

No. For me one of the biggest problems in the videogames industry is the relationship between developers and publishers - it's plagued by distrust, by a lack of relationship. The people involved change, so why is there trust?

You look at publishers, they're bought and sold, developers are bought and sold. This lack of trust creates a situation it is hard to count on eachother but that is what production is about. Trust. That the publisher will pay, that you can continue and pay your man-months, and that the developer is delivering something monthly that is indicative of the final result and that he will get there.

I think that by including a third party that takes the money situation out of it - and that's what completion bonding does - it pushes both sides to respect the commitments made, and I think that will change the industry in a better way.

Is the market being skewed by countries like Canada though?

It's definitely being skewed, and by Canada in a big way. You look at the way that companies like EA, Ubisoft and Eidos are opening internal studios in Canada, and it's hard to compete.

But I think that videogames are still a hit-driven industry, and publishers are looking for titles and developers that they can trust and continue working with worldwide.

Money is a big issue, of course - to have to break even and to identify the profit and loss risk before you launch production is very important - to answer your questions about the market being skewed, I've worked on 20 plus games and I'm yet to work with Canada or Singapore, soâ¦

Risa Cohen is an independent producer. Interview by Phil Elliott.

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