Plan for Joe Maruschak

Hello all, I am have been keeping a low profile and have not been contributing as actively as I had in the past. I have been spending the last several months working hard to get the business end of our company rolling. It has been quite the education.

BraveTree has had several things in the works and we hope to announce soon some of what we have been working on. Hopefully they will be well recieved by the community.

Below is a repost of some thougths I had on the game industry that came out of an attempt to turn a flame war into a useful conversation.

I didn't work.

Here is the the original thread:

garagegames.com/index.php?sec=mg&mod=forums&page=result.thread&qt=6407

Here is the post I made:

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Having worked in the game industry for a while, and knowing many people who also work in the industry at many different game houses I can say that your first statement about "capitalizing on the desires of the young" is unfounded and represents the absolute worse case scenario, which is a scenario I have not yet encountered.

No-one works 22 hours a day. If this is what you heard, you heard wrong. For most projects, the hours are quite normal(40 hour weeks). There are crunch modes where you might end up working 12 hours a day 5-6 days a week, but those are usually 2-3 months at the end of a project, and we do usually get well compensated for the effort expended. Usually this comes in the form of comp time (3-4 weeks off, with full pay) above and beyond our normal vacations. There are also completion bonuses, and one of my friends is getting 3 weeks off and a $3000 travel voucher when the project they are working on ships.

50K/year is not chicken feed. That is a good livable wage. You won't be able to buy a Ferrari with it, but you can raise a family. Is it on par with the regular IT industry? No. It isn't. But it is a far cry from working like a dog in a shoe-sewing factory.

Also, that number represents the average salary. Starting out the pay is lower than that, and after a few years of experience the pay goes well above 50K, especially for seasoned programmers.

It is true that when one first gets into the industry, the pay is low. If you decide not to accept the pay, then there are many others willing to step in and do it for less. It is the Law of supply and demand. Inexperienced developers are plentiful. Experienced good ones are in short supply.

If this is going to change, then the supply of those willing to make games for peanuts has to decrease or the demand for people has to grow (industry must grow). This is pretty self regulating and is not a conspiracy of the industry big wigs.

In regard to game company culture, when you are on the 'inside' of the bigger game development houses, it is not all that bad. They treat you pretty well. I found many things frustrating, but I did not feel that I was getting totally screwed. I am not going to preach that everything is all rosy and happy. It is often not. Working on Rev products often feels like a factory job. It gets boring, and the royalties are not going to be high. It is a mixed bag. A huge AAA title is hard to work on and the hours are long. Rev products are a lot more sane (normal 40 hour weeks), but the royalties are low and the prestige value is also low (sounds less impressive on the resume).

More often than not though, is interesting work. It is often not glamorous, but it is very creative and challenging. It is also gratifying to see the final product. When it comes together, there is no better feeling. It is not all fun and games. It is hard work, and it feels good to make something that makes people happy. I can't put a price on this type of reward. It adds something to my life that has no dollar value.

Are the hours long? Yes, but Sweatshops they are not. Make your own hours, wear whatever you want, good equipment, nice people. Lots of perks. Free coffee, free soda, t-shirts, etc..

At times, It can be frustrating and annoying, but even the worst of what I have been through in this industry is better than most of the jobs I have had.

People who run the big game houses do make pretty good money. They do not make millions upon millions as you seem to imply. The owners of game studios that I have talked to have sacrificed a great deal to create their dream. Many go with little or no pay for years in order to put themselves in a position to make 'the big bucks'. When they make 'the big bucks', they are being rewarded for the years of sacrifice they have endured to get to that point. This is as it should be. The ones I know are talented developers that also have a high degree of business savvy. They are the exception to the rule. I know a few who are doing quite well, but they are not the corporate jet, own an island in the Bahamas type of rich that your initial post seemed to suggest. (this is my perception of what you wrote).

There are a few exceptions (naughty dog, id) but these places are again, the exception, not the rule.

It should be noted that if one chooses to work for the larger the development house, the less freedom they will have to do what they want. If creative freedom is desired, a startup is the best bet, and the pay while working for a start-up is VERY low, although the back end incentives are really, really good.

I found what you wrote in your initial post to be an exageration of the reality of the game industry.

On making money in the games industry, here is my take.

First, the way to make money on games is through selling units. You need to sell a whole lot to make any real money. The key to this is distribution. If you want to go with a box product, that is on the shelves, you need to go through a publisher. They have that distribution channel locked up. You will not get into that realm unless you deal with the publishers and the royalties for the 'service' they provide is pretty high.

You can make more per unit by not using a distributor. You can make a game and sell it off your website and keep all the profit. The trick is selling units. How many can you sell off of your own website? Publishers are in business because they can push the units. Making $3 a unit for 50,000 units is better than making $10 a unit for 1000-2000 units.

As for funding games, do you have any idea of how much it costs to produce a box product that can compete in todays market? If you paying game industry standard wages, it can get very expensive. Can you compete with Blizzard for shelf space? If you can, then get someone to give you money and go for it. It had better be damn good to convince the consumer that it has what it takes for them to part with $50.

In order to get the funding necessary, you need to convince someone with money that the initial outlay of cash is going to bring them a return. Publishers used to do this (give an advance on royalties) but this is getting harder and harder to do. They do not need to fund development. There are enough people with ideas and motivation that are getting funding from other sources that the publishers don't need to act as a bank as much as they have in the past. Publishers are risk adverse. They make money selling product. A new idea from an unproven developer is not a sure thing and is a big gamble to them.

In order to obtain the funds, you need to prove ROI, and with the numbers we are talking about, self distribution doesn't work. You need to lock up a publishing deal before the people with the money will give it to you. The publishers won't guarantee anything. If you build something that can compete in the marketplace, the publishers will buy in. But, you need to funds to build it. How you do that is up to you. Convince someone that you will make them rich and you get your funding.

The ones who get the funding are the ones that can prove to someone that they have what it takes to take the money given to them and turn it into a product that will make back the money with a large return. They have to have confidence in you. If a developer has not made a product, why should the money man trust them? Would you give a million dollars to everyone who thought they could make a game?

So, getting funding is hard to do to produce a game. Making games that can compete is expensive and getting more expensive every day. Money does not drop out of the sky and getting it out of an investors or publishers pocket and into your bank account does not happen overnight. It does happen, so there is no reason not to try.

You will have better luck getting money from people for funding if you can maximize their Return on Investment. If you maximize the percentage of back end profit, they will be more interested. If the number of units that need to be sold is very high before they make back their money, the investment will be less attractive.

Ways to maximize the back end profit?

Make your own technology. The owners of the technology do not have to pay royalties to a third party. The people that make the technology (game engines) have to make money somehow, and they do this with a large up front payment, or royalties (they give you an advance on the price of the tech and basically have a lien against the money you make), or both.

Using established technology reduces risk in the eyes of investors/publishers and increases your chances of getting funding. This risk reduction cost you money on the back end. If you want the big payoff, take the big risk, and build your own technology. Catch-22 here. Using established tech is a HUGE reduction in risk. Building your won tech maximizes back end returns for investors. Both are god things, but they are mutually exclusive. If you build your own tech, you will most likely be doing on your own nickel. If you can get someone to fund it, you are extremely fortunate.

Do you know how much it costs to build an engine that is competitive in todays market? The price tag can run into the millions. The Torque (or the Quake Engine, or Unreal, etc..) wasn't built in a few months in someone's spare time. It took the concentrated effort of many skilled and experienced developers over the course of a few years. Getting funding to build an engine is hard. It can be done, but the risk is high and the returns are not guaranteed.

Another way to maximize back end profits is to own the distribution channel. Make the games and sell them. Keep all the profits after expenses.

GarageGames is doing both. They own the tech, they own the distribution channel. Good for them. There is nothing to say you cannot compete head to head with them.

To Do so will be difficult and expensive. Build a AAA engine and sell it for $100 and hope that individuals can make games that will sell and produce royalties. Pretty big risk if you ask me. If GG can pull it off, more power to them.

In order to make money, you can try the other on line distributors. Some are more established than others, and have greater market share. Check the royalty deals and the exclusivity clauses.

Try to sell as many units as you can, to whoever you can, any way you can, and try to keep as much money from every unit as you can. Read the fine print.

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On GarageGames.

Jeff is a good businessman. You can take this any way you want. He is where he is because he plays the business game well.

Jeff likes games. When you talk to him in person, and the talk turns to games, his eyes light up, he gets excited, and my perception is that although he intends to make money doing this, he genuinely wants to see good games being made and wants to provide people with the resources to make it happen.

GarageGames is not making money hand over fist on this venture (yet). You are entitled to your opinion, but the deal they are offering sounds pretty good. You get a good engine cheap. If you make a game with the Torque, you have to sell it though GarageGames. The reduced cost of the engine is paid for by the returns of the game sales. One important thing to note is that the royalties are split. If you sell three games, you split the profits. You do not have to give the first 250K to GarageGames for the use of the engine as you would with some others.

If the game sells like hotcakes, GarageGames will help to get it box published. They will take a cut, but they most likely will be able to negotiate a better royalty deal than you can. Self interest will be a big part of any negotiations that take place here, so it is actually in the developers best interest to have GG have a cut (they will fight for the best deal they can get with a publisher). Like it or not, the folks at GarageGames are probably better connected than you and have more experience negotiating terms for game publishing. Jeff has how many? 70 something published titles under his belt?

In this regard, GarageGames starts becoming a valuable resource. If your creation can make GarageGames money, they will do their best to try and get as many units sold as they possibly can.

They are not trying to get rich on any one person. I see this approach as a gum ball machine approach. Get many people to give you small amounts of money instead of One person to give you large amounts of money.

It is not in their best interest to screw people, especially those that actually have the skills to make a game that is worth buying.

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On the Torque game engine.

It is a good engine. In some ways it is not as good as the other 'pro' engines, and in some ways it is much better. It is not the end-all-be-all, but it is a good deal.
It doesn't have the latest vertex shaders, etc.., but if your game needs that, go buy a better engine. It will cost you.

For someone wanting to see what a industry engine is like, it is the cheapest education you can get.

For a single programmer/gamer hobbiest, it is a good deal. It is fun to make stuff with, and the price is no more expensive than a Lego Mindstorms kit.

For the serious indie developer? Maybe. Time will tell. The distribution channel has not yet generated any data as to what kinds of returns one can expect. The Play Games site is not live yet and it is anyone's guess how much revenue it will generate. The proof will be in how well the games sold here generate revenue.

For the established developer? Ehh, depends on your situation. If the established developer has contacts, technology, and IP, it may become confining and limit what they can do. If it is for their main product, the revenue stream is un-known and would make such a venture a huge risk. As a supplemental revenue stream, or as a testbed to test out prototype ideas, it is a viable option.

Think of it this way. You can make a demo for a publisher pitch, and if the publisher likes the demo and funds it, you get a different engine and re-build from scratch with funding, negotiate with Jeff to use the Torque, OR if no one bites on the product, you sell it on GarageGames to get back some of the investment. My thoughts are that on line distribution allows for a greater 'shelf life', so while the returns may not be immediate, even a medium quality product may pay for itself in a few years.

Additionally, it has been stated time and time again that developers will be able to negotiate better royalty deals by adding back to the engine.

I don't think anyone is try to deceive anyone here. It is a gamble. I will not argue with that. Due Diligence is something that one must do if they plan to be in the 'business' of making games.

My company is taking a measured risk in regards to this. We are making a small Torque powered game to test the waters. (Minimize our investment). We have made games with this Engine (2 shipped box products), so we know the technology well.

For us it is a good idea. A revenue stream, even if it is small, is a good thing. We do not intend to get rich off of our title. We have, what I think, are very realistic expectations of the number of units we will sell. If it works out that our speculation is correct, we believe that we can generate enough revenue to make it worth our while.

The problem with most of these business discussions are that most of them are bringing up issues that are relevant to established development house and not particularly relevant to indie game developers. Call them 'dreamers', or whatever you want, but this site and this engine give them something that not easily attainable in the past, and that is a chance to make a game and make money doing it. If the game is the greatest thing since sliced bread, you will make millions no matter how many people are taking a cut. If the game is mediocre, you will lose the investment in time and any money you put into it.


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Closing thoughts:

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Quote:

One of my biggest observations is the fact that the Messiahs have/are now guaranteed to make millions!

The 'messiahs' are not guaranteed to make millions. If they are, I would like to know why it is a guarantee and how you have arrived at that conclusion. I would be interested in hearing your opinion on this. I don't personally know anyone who makes millions who has not expended a great deal of effort and took a great deal of risk to make it happen.

Again, I have this image in my head that you think the head of most studios live like something out of the movies like "Blow" or "The Thomas Crown Affair". This has not been my experience. Some that I have met live well, but they do not have lifestyles I would consider to be more excessive or extravagant than any business owner in any other industry, and often less extravagant than your average lawyer or doctor.

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Financing not guaranteed? Reality check. Independent studios with experienced game developers with multiple shipped box products under their belt are having trouble getting funding. Getting money to make games is HARD. Money is not guaranteed to anyone in this industry.

The chances of becoming a indie developer are not good. Did anyone ever say they would be? Making games is hard. Making fun games is harder, Making fun games that sell is very, very hard.

The failure rate of small business is over 80%. Why should game companies be any different?

I think that the majority of 'companies' here will 'go under' because the majority of them had unrealistic expectations to begin with. Making a game is harder and takes longer than most think.

The game industry is not all fun and games. It is what the name says it is, an industry.

The game industry is a business. If you get into the business end, then you will be dealing with business people. Some are honest, some will try to screw you, and all will try to work out arrangements to maximize profits for them and not for you.

It is what it is.

All of that being said, I am doing this because this is what I like to do. There are no assurances that I will be successful, but I am not going to let this stop me from trying.

If you want to make games, you will find a way.

Joe