According to the ESAâs reports, the five states that are serving as game development hubs in the US are California, Washington, Texas, New York, and Massachusetts. This shouldnât come as a surprise to anyone; cities like Seattle, San Diego, Austin, and their peripheral towns are often mentioned in gaming press. This is fine â certain hubs are expected to rise up in any industry, and game development, at $22 billion domestically per year, absolutely qualifies as industry. However, it is becoming increasingly apparent that there is a need to start expanding into new locations if studios expect to continue to grow profitably. It comes down to cost: the cost of living, and cost of business.
The cities and regions that game developers are based in right now tend to be expensive: the amount of money it takes to maintain the same quality of life is higher than in other cities. As an example, comparing Portland, Oregon, and Seattle, Washington, two cities that offer similar climates, similar cultural opportunities, overall a similar quality of life. In Seattle, an examination of average office lease rates are running between $25 and $40 per square foot depending on where in Seattle you are (and where most of these companies are located, youâre looking at the high end of that range). A similar examination of Portland puts the lease rates between $12 and $25 per square foot. (To put those prices in perspective, Bungie recently announced their move into downtown Bellevue, leasing 85,000 square feet. Assuming they got a killer deal and only paid $30 per square foot, thatâs still $2,550,000.) An equivalent space in Portland, assuming, say, $20 per square foot, is $1,700,000. Thatâs an $850,000 price difference, and thatâs only one part of the overall cost of doing business.
Looking at the cost of living for the employees themselves, median apartment rental prices drop nearly in half between Seattle and Portland. While other price comparisons are less dramatic (the cost of heating a home doesnât vary much, which is unsurprising considering they share a similar climate), it still works out to a net savings for the employee to be in Portland. What this means for the employee is that they can live at the same quality of life, for less money. What this means for employers is that they can price their salaries accordingly (as they already do), and again, save money to either a) bring down development costs, or b) hire more developers.
Of course, so far weâve only discussed basic numbers, on the assumption that one would have to pay for everything involved. For a number of developers, this is already not the case: both Ontario and Quebec (and respective cities Toronto and Montreal) offer significant subsidies to game companies to build studios there. It was reported a few years ago that the city of Montreal and the province of Quebec combined subsidized over half the salaries for Ubisoft and EA, two major developers and game publishers. Ubisoft is expanding again, opening a new studio in Toronto, who have committed to investing $226 million into Ubisoft over the next ten years. Here in the U.S, 8 states have already passed initiatives to encourage game development, including significant tax breaks and other incentives to draw the industry in. The city of Savannah has gone so far as to offer a full year of office space free to any company willing to commit to offices there.
Now, I realize it is pretty rare that a company is in a position to be able to perform an en masse relocation (there have been a few examples, such as when Square moved from Washington to California, or when Bungie moved from Illinois to Washington), but that isnât really what anyone is trying for: as development teams grow, new facilities are needed, and new development teams are created. These new studios and teams are in a prime position to make use of the lower development costs of setting up in a less expensive city. It would be foolish for a large game developer to not at least consider this when building out their next team.
The cities I expect to be great additions:
- Portland, Oregon: the city has so much going for it in, and is already starting to undergo a bit of a cultural explosion thanks to its fantastic music and art scene, green policies, and laid back atmosphere.
- Minneapolis/St. Paul, Minnesota: it’s been largely off the radar for a lot of people, yet sports a remarkable diversity within the area, low costs, and is something of a jewel of the central states.
- Boulder, Colorado: it is already becoming a pretty significant tech hotspot, housing a number of startups and offering a range of support for the software industry.
What Activities That Can Be Turned Into Games? over at Lost Garden. Fascinating article, discussing the role of things like the WiiFit on expanding the horizons of game design in society.
The harbinger of game’s ascendancy to all aspect of the modern life is not some piece of evocative art or Citizen Kane-a-like. Instead, our future appears in the form of a glorified bathroom scale. Still, if we can improve people’s lives with a bathroom scale, just imagine how games can transform the rest of our world. (Danc at Lost Garden)
What gets me is that there are assholes out there who manage to get funding to pull this sort of stunt, when there are hundreds, if not thousands of folks who are working on mods and indie games that would KILL to have even a share of their funding that can’t even get a publisher to pick up the phone.
What am I talking about? A little game called “Limbo of the Lost”, which has received publisher funding for at least 6, if not 10 (as claimed) years, which just recently came out. The vast majority (not 50 or 60%, but more like 80 or 90%) of the content is directly stolen from other games, often without even so much as a color change or added component. This is not an epic fail, this is a LEGENDARY failure, across the board, first on the part of the corrupt developers whom I hope NEVER work in the industry again (I’m sorry, you do not get a second chance after this), and on the part of the publisher for not practicing even an iota of due diligence in reviewing the game.
Some worthwhile links to read about this: Rockpapershotgun.com’s coverage, Zen of Design — “Call it a Remix”, and this forum post at cheapassgamer.com.
I’ve always enjoyed Jerry’s writing over at Penny Arcade, so I suppose it should come as no surprise that I think he damn near nailed the game industry metaphor when he said this:
The stakes are high, and getting higher, and publishers who were once merely gun-shy are now officially paranoid, rolling around in a padded cell until the drugs take effect. Part of the reason GDC made me uncomfortable is that I could feel its culture pressing on me from all sides, and I knew it wasn’t mine. But the other part was that I got a sense of how brutal that life is, how unstable it can be, how maddening, and I just wanted to come home and match gems or some shit. I didn’t want to see it anymore. I don’t want to think about a cow’s quiet eyes every time I grip a hamburger.
(Link)
Richard Bartle in a GameStop, found via in the ineffable Greg Costikyan. There’s not really much I need to add to this, it sort of speaks for itself. I laughed out loud in the middle of a coffee shop when I read it. It’s a bit like having Kerouac show up at your open-mic poetry slam.
The Wii Loop Machine, found via the new site KiiWii. This is absolutely brilliant, and really highlights just how many new avenues for expression are being opened through rethinking how we control things. I could go on about it, but I think the video really speaks for itself.
Before I get into my own tirade, there’s some recommended reading for you. Don’t worry, I’ll wait:
Braid wonât be at Slamdance after all.
flOw won’t be at Slamdance after all.
Braid Ditches Slamdance in Protest
Slamdance Pulled SCMRPG On Moral Grounds (Referenced from a Rocky Mountain News article.)
Slamdance: SCMRPG removal was personal, not business
Super Columbine Massacre: Artwork or Menace?
Everyone back? Good. As has been raised by several of the more cogent posters, it’s not directly a first amendment issue (which I’m sure regular readers have realized is something of a personal windmill I tilt at), since the Slamdance festival is technically a private organization, and has a right to decide what will or will not be shown at their festival. But there is definitely still some relevance to the battle against censorship and winning over the public mindshare that games are a valid form of creative expression, and deserve the same freedoms afforded to other media towards that end. There is no legal recourse, but that does not mean we should not raise our voices in displeasure at this sort of behavior. As a festival that ostensibly supports the idea of games as art, it is patently unacceptable behavior to remove a valid game from the competition due to a specious claim of moral concern. There is no legal recourse, since it is a private organization, and so the only method of protest that remains to us is to not participate in the festival, to encourage others to withdraw as well, and to express in no uncertain terms exactly why we are doing so. I applaud those developers that have already chosen to make that stand, and hope their other brethren soon follow suit. It is only through community and solidarity that we’ll truly drive home the point that this sort of censorial behavior is not acceptable.
This week on Gamasutra, Stephen Ford’s article has garnered a fair bit of coverage. Is there something wrong with how business is being conducted in the gaming industry? Perhaps. That said, there are a great many companies doing fantastic business and reliably turning out quality products while increasing profits year-on-year. Regardless of any talk of problems needing correcting, Ford puts forward the idea of small production companies dominating the gaming industry in the future. What he’s suggesting, in essence, is that the games industry should adopt the production model that the film industry currently uses, especially as the average AAA game budget increasingly resembles the average blockbuster film budget.
Let’s take a look at the parallels between his model of game development and the film production model he’s basing it on: say we’re a film production company and we want to make a big comic book movie from an IP that we’ve optioned. So simulatenously now, we’re gonna start making the rounds of the different studios and see about finding one who’s willing to give us the money, we’re hiring a screenwriter to write the script, and we’re bringing on board a director and possibly casting the lead roles, simultaneously negotiating all of the contracts with all of those people. That’s the early stages, the make or break stuff. Boom, we’ve got one studio that’s willing to give us the money, and we found a director and big name to star. Let’s say the director also has a character artist he wants to help shape the look and feel of the film, plus an editor and cinematographer he likes to work with, so in this case we don’t need to find those people. So now we can really get into pre-production, scouting locations as we get our casting director on board (we probably use the same one or two over and over again), and hire the special effects company that we want to use, arrange the rental of all our equipment (possibly from the studio that has given us the money, possibly from one of the many other places in town that do such things, perhaps from several such companies), hire all of our production assistants, assistant directors, set dressers, grips, lighting board ops, sound guys, makeup artists, art assistants and all the rest, arrange transportation and housing and food for everyone, and THEN we can start production.
That’s a lot of fuss, a whole lot of negotiations, and a whole lot of places things can go wrong. Film production is a massive undertaking, even for a modest budget. It’s super expensive, because all those people are contractors. It requires knowing just about everybody in town, and the town’s pretty much gotta be LA or New York. So why is that a good idea?
It all comes down to due diligence. For every step of the way, you want to have the very best people you can possibly hire in each role, and you need to be able to fire them instantaneously if they drop the ball in any way. With a good reputation, you’re golden and you can get work into old age if you can keep up, and make LOTS of money in the process. That’s why LA is so notoriously networked. It’s all about who you know and what you’ve worked on, because as your reputation as a producer improves, so does the quality of people who want to work with you, and the more likely it’ll be for the studios to give you big piles of money. The film industry is one with vastly more people looking for work than actual work, and the production house system lets the cream rise to the top, in theory at least. While it seems like it would be cheaper to have everything under one house, it’s important to note that the film industry adopted the production house model to reduce overhead as well as risk while improving the quality of the films produced. Despite my significant dissatisfaction with most of the pablum produced by the film industry, after looking at the stuff made in the 60s and 70s, I’d have to say it’s been largely a good choice. The competitive pressures of the production house model help to ensure that the best managers are in control of most of the money in the industry.
Is the film industry the same as the game industry? No. The process of building a game is a different thing, with its own unique goals and challenges. But can the game industry use the business model utilized by the film industry? Absolutely. The increasing use of outsourcing makes it increasingly possible. As specialized companies rise up to provide the very best quality available in their specialty at a price comparable to doing it yourselves in-house with no worries of overhead, then we will of course see the small production company rise in popularity within the game industry. I don’t think that the studio model will be supplanted, but I do believe that once a major hit of the Half-Life or World of Warcraft variety is produced via this method, we will rapidly see a vast shift, specifically with regards to expansion of the industry. Starting a development house these days is a daunting task. Smaller companies committed to doing one thing perfectly just makes good business sense. The small production team is the natural outgrowth of that market trend. It’s sure not going to happen overnight, but we will see it happen.
I hear a lot of talk about how Sony is trying to win ‘the HD format war’. At this point in the game it seems that there will be no winner. VHS was a poor technology that had long outlived its usefulness, and DVDs are vast improvements over VHS tapes. Having a DVD player is downright obvious at this point. But who needs either an HD-DVD or BluRay player? Other than audiophiles with $10,000+ home theatres, do you know anyone who feels that DVDs are in any way inadequate? There seems to be this assumption that one of the two will be crowned king of the movie market and the public will en masse gather behind the new king and stop buying DVDs. See, that’s just crap analysis. The only thing HD-DVD or BluRay has over DVD is higher expense, better picture, and more onerous copy-protection. DVD over VHS has chapter select, extras, better picture, similar cost and a smaller form factor and even then it took five years before the market had predominantly switched to DVD. So hear me now. Both HD-DVD and BluRay are doomed to obscurity, right alongside laser disc, mini disc, SACD, dvd-audio, and all the rest of the formats that weren’t vast improvements over the previous generation.
Five years from now they’ll put HD video on something like a minidisc and then that might become popular if readers and writers are cheap enough and the format natively supports both rewriting for data and DRM lockdown for the studio-produced discs. Plays on your 10th generation iPod (with 20 hr life playing hd video) or pop it into your Xbox 4ever and play away. But this? This is not a winning product. Neither HD-DVD nor BluRay has much over previous technology, and so both will rapidly fade into memory, just as UMP already has.
Sony is banking a lot on the notion of BluRay winning massive public support and becoming a de-facto standard. But it’s simply not feasible. In other words, they’re going down. They’ll bring in a butcher as the new CEO in a couple years who will pare everything down to their core profit centers. We may or may not see a PS4. Already Sony is shifting gears to a Japan-centric stance in the console war, regrouping to focus on the one market they know they can win. But can they? Nintendo is huge in Japan, and the DS is the clear winner over the PSP when it comes to both market share and profits. Sony may make good money with the PSP in Japan, but Nintendo is especially poised to dominate the video game market of Japan right now (as well as the world at large, to be honest). Half the cost counts for a lot in Japan’s dull economy, not to mention Nintendo’s efforts to expand the video game market past the hardcore Famitsu-reading fans will likely reap huge windfalls of new players. Sony will make good profits and push many units out the door, but in terms of market share they stand to lose in this generation.
The fate of Sony hinges primarily on the Cell processor coming down in price, up in yields, and being used across the brand for the next decade. While they are weak now, if Sony can push through the rough spot without falling down, and get even one major consumer electronics hit on their hands based on that new tech, then they could well see the land of rising profits once again. The PS3 may or may not become profitable in the US market– at this point it’s a crap shoot. But we do know that Sony’s dominace is over– they will have to play much better than they have in the past or they may be forced to walk Sega’s unenviable path. The PS3 may be Sony’s Saturn. I do believe that they could well rise again to the global market dominance they have enjoyed up until now, but it will most assuredly be a long, dangerous road for the corporate behemoth.