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New business models for game companies

Posted by Zaph on Thu, 13/05/04 - 6:44 PM

This is an extension of some things that were discussed in the "Whats it pay" thread, but since it was getting off-topic I thought I'd start a new thread.

The following is an interview with Alex Seropian, one of the original Bungie guys, who has started a new company with a different development/business model.

[url]http://www.gamesindustry.biz/content_page.php?section_name=dev&aid=3382…]

quote:"Wideload employs only ten core staff, who focus on prototyping new ideas, and then after this stage, development work is farmed out to independent contractors rather than to a large internal team"

Now I personally see this as a parallel to the direction the film industry took 50 or so years ago. In the early days the studios kept a full staff of talent to make movies, paying them wages - but after a while things drifted towards todays model of hiring people for specific movies (or a contract for 3, or things like that)

Yet at the same time there are movie studios like Pixar who do it all in-house (apart from the 'talent') (maybe thats because they are also a software house?)

I'm undecided whether it's good or bad. I'd hate to work on contracted jobs myself, but I can see the attraction for this guy and his startup business.

What do others think - is this the way of the future or a step backwards, or just 'different' ?

Zaph


Submitted by Red 5 on Thu, 13/05/04 - 7:50 PM Permalink

I believe it is the future of game development and I think the advantages outweigh the disadvantages... here's just a few.

It keeps everyone on the ball: outsourced work has to be done right and delivered on time or it doesn't get paid for.

Lower overheads: less software/hardware, staff wages/holiday/sick pay etc expenditure and can operate from smaller less expensive premises.

Better tax incentives.

Less time spent training staff.

Less staff to pay during the transition inbetween games.

Can get experienced professionals who specialise in certain aspects of game development working on your game.

Faster development timeframes if required.

Of course there are a few drawbacks such as bouncing ideas of co-workers etc but with video conferencing "virtual" weekly meetings can be arranged for all contractors.

Submitted by Rahnem on Thu, 13/05/04 - 8:27 PM Permalink

I think this is probably be the preferred model for small/startup development companies as it saves them money. Large companies that have two or more games on the boil at one time and have a staggered development program will probably continue to have a good portion of their staff full time.

Submitted by Jacana on Thu, 13/05/04 - 8:44 PM Permalink

I think this could be quite an interesting model and hope that it will find success.

One of the main reasons for this would be that it could allow smaller studios to actually get some work on more high profile titles. Sure it won't be that studios work alone, but it still is a good start. Smaller companies (not indies) start of with a good solid experience background and a just looking for the point where they can get "their break".

This type of system would allow those smaller companies to use their current resources to their fullest potential and actually put some work into a title that would be recognised.

That does not mean this model is perfect but I think that this sort of model does very much support small developers.

Submitted by unknownuser2 on Thu, 13/05/04 - 10:10 PM Permalink

My oppinion is that while small developers will benefit - it will depend on the nature of the project, ie what needs to be built etc.

It would indeed help smaller dev companies grow, to medium and perhaps larger sized companies to allow for bigger more involved projects.

I think a unity of several small companies under the umbrella of a single guise or project, would be far more potent a force than a single large dev team.

Flexibility, cost effectiveness, and time management would HAVE to be paramount, otherwise like red5 said noone gets paid.

Im a thumbs up for this business model and think its definately the way to go - to push up the level of working conditions, create more realistic deadlines, and ultimately lead to better wages and greater job satisfaction.

Submitted by Daemin on Thu, 13/05/04 - 10:37 PM Permalink

I think this is the way employment in general is moving. Away from the secured full time position to a more flexible contract based approach. Employers want to see this because then they can hire only enough workers to get the job done and not have to pay anbody for the "slack" that's left over. However for employees it is not so good, as they are uncertain about where they will have their next job...

However the flipside of the coin is that experienced people will be more and more expensive to contract out, as the more experienced someone gets the more they know and can contribute to the success of a project, therefore the more they can get from their employer etc. This would probably force some employers to offer full time / permanent positions to more experienced people so that they could give them "security" in lieu of higher contract wages.

Submitted by Red 5 on Thu, 13/05/04 - 11:46 PM Permalink

quote:Originally posted by Jacana
I think this could be quite an interesting model and hope that it will find success.

I know of a Swedish developer who are basically a core management and marketing team. They outsource just about all their art and programming all over the world (including Australia). These guy's are working on their first title (due for release in the next couple of months) and already have immense respect from some of the largest, longest established developers in the industry.

Look at it from this perspective... these guy's are very passionate about what they're doing and have a clear idea of what their target audience expects.
By choosing to outsource they can be very picky with whom they have working on their game, for instance they can source an AI programmer who lives across the other side of the globe, somebody who might have more experience and be better suited to the task than somebody living in their own country.

Submitted by Daemin on Fri, 14/05/04 - 3:25 AM Permalink

Well employment will always be a balancing act between outsourcing and hiring people internally...

Some businesses will be most successful on either end of that spectrum...

Submitted by souri on Fri, 14/05/04 - 9:57 PM Permalink

I hope it doesn't get to the point where contractors or small companies doing outsourced work are undercutting themselves / giving themselves an extremely slim margin just to remain competitive. And when you're competing against a company from a third world nation who can do the same kind of work but for a much cheaper price, it's definately going to be tough. There's the whole debate on the effects of outsourcing on a country (developing the skillbase offshore etc) too...
I hope the local industry in the future won't be developers with a core team of managers and no content creators, and local teams of content creators fighting it out against third world nations for business. It just spells disaster for creatives and programmers..

Submitted by Daemin on Fri, 14/05/04 - 10:15 PM Permalink

With programming that is a real possibility, however with art I doubt that will happen. Art is very specific to the region that it is created in, as different countries have different artistic bents. That's why we haven't see many Indian video games (from India) as their art does not fit into the mainstream of US/UK etc. Well at least that's what I see for the near future, who knows what will happen later on. Perhaps some of these third world countries might become too expensive?

Submitted by Red 5 on Fri, 14/05/04 - 11:54 PM Permalink

quote:Originally posted by Daemin
That's why we haven't see many Indian video games (from India) as their art does not fit into the mainstream of US/UK etc.

You've probably played or know of a US/UK developed game that has used art produced in an Asian country without your knowledge, for example the #1 selling game in the UK charts (only a few weeks ago) had a lot of it's content produced in S.E. Asia, and this game was developed by a UK studio.

Submitted by Daemin on Sat, 15/05/04 - 3:40 AM Permalink

But then you could also classify Australia as being a part of South East Asia, some places that's true...

Submitted by Red 5 on Sat, 15/05/04 - 3:45 AM Permalink

I've never thought of Australia as being part of S.E. Asia, I'm talking about Asian countries.

Submitted by Blitz on Sat, 15/05/04 - 8:50 AM Permalink

I would think companies would be much more comfortable outsourcing art than programming. A few reasons
1) Art can be done anywhere, no matter what the "style" in a particular country is. Once you have the concept (done by your in-house guy) it is a somewhat mechanical, less creative process to convert that into a 3D model etc. if the concept (including its style)is followed.
2) There is much less chance of theft/leak of sensitive codebase when outsourcing art. Art assets are generally atomic, and don't require the artists to have access to any source code.
3) Programming is generally more expensive, in terms of time (and therefore $$). As stated before, art assets are generally atomic, they can be broken up into much shorter term projects. Consider 1 week for a model, vs maybe a month for a certain graphics module. If the art asset is sub-par, then you've only lost a week, and you can even take that asset and improve it, rather than starting from scratch. A sub-par programming module generally does need to be re-written from scratch.

Outsourcing can happen for code, but i would suggest that more likely companies will buy already-written middleware (rather than hire a seperate company to make a new module), and if they want expertise, they will contract some people in for the length of the project, rather than fully outsourcing to a seperate company.
My thoughts anyway.
CYer, Blitz

Submitted by unknownuser2 on Sat, 15/05/04 - 10:38 AM Permalink

i have to agree with that generally blitz - but then again, i dont see the problem in say a company like wideload, taking on say a company that Mr x started up that specialises in programming engine technology, and then Mr y's company who runs an art studio that specialises in making only low poly in game models. and so on and so on.

Although quite rightly the process is alot easier and more atomic for art, i think programming could indeed be outsourced to a singular company, rather than breaking the entire engine up into modules and farming each individual piece out.

I think both art and code outsourcing is completely viable, with the right planning and groundwork, but some vastly different measures would definately have to be taken when farming out code, IMO anyway.

Submitted by JonathanKerr on Sat, 15/05/04 - 11:45 PM Permalink

Um... how can Australasia be S.E Asia? We're in the Pacific, aren't we?

Submitted by Red 5 on Sun, 16/05/04 - 12:45 AM Permalink

I think Daemin was taking the piss ;-) he was refering to some of the Asian hotspots within Australia.

Submitted by Daemin on Sun, 16/05/04 - 1:56 AM Permalink

Well we are south and east of asia, and sometimes reffered to as being in asia.

I have seen Australia reffered to as being in "South East Asia", "Australasia", "Oceania", "Pacific" etc...

It just depends on your perspective I guess...

Submitted by Blitz on Sun, 16/05/04 - 7:03 PM Permalink

quote: i have to agree with that generally blitz - but then again, i dont see the problem in say a company like wideload, taking on say a company that Mr x started up that specialises in programming engine technology, and then Mr y's company who runs an art studio that specialises in making only low poly in game models. and so on and so on.

Although quite rightly the process is alot easier and more atomic for art, i think programming could indeed be outsourced to a singular company, rather than breaking the entire engine up into modules and farming each individual piece out.

You could, but if you are going to do that, why bother, just buy a license to the latest greatest engine, doom3,unreal3, etc. rather than waiting 3 years for your outsourced company to create a brand new one. As i said earlier, i think for anything like this middleware is the more sane option, and will be used much more frequently than contracting/outsourcing to another company.
I'll just add that things like engines aren't game specific the same way as art assets, so there is no real need to develop them specifically if there is already a middleware solution that does the job.
CYer, Blitz