OCT. 4, 2007 • It is a very lonely neighborhood for the independent game publisher. The economies of scale long ago tilted the publishing business in favor of heavyweights such as Electronic Arts, Activision, THQ and Microsoft – companies with the cash to secure retail space and snap up successful game developers.
A notable exception from back around the turn of the century was Gathering of Developers (GoD). Driven by the idea that there was money in publishing games, while at the same time providing developers with a financial incentive to make the games they wanted to make, GoD played the anti-hero gunslinger in comparison to the staid barons of video game publishing. In the end, GoD’s games made money, but the venture lost its vision after a buy-out by Take-Two Interactive, and eventually faded into obscurity.
Mike Wilson, Harry Miller and Rick Stult were three of the executives behind Gathering of Developers. Last year they decided to give game publishing another go, founding Gamecock Media Group. Now more that 12 months into their new venture, DFC queried CEO Wilson, President Miller, and CFO Stults about how Gamecock is doing, and what it is like running an independent game publisher the second time around.
Mike Wilson
Straight Shooting
DFC: Please give us the quick rundown of Gamecock, who are you and what makes you different from the thousands of other game startup companies looking to shake up the video game business model?
Mike: Gamecock Media Group is a privately held, independent computer and video game publishing label focusing on original IP’s from strong independent developers worldwide. We provide a relationship-based model in dealing with game developers, who we consider to be entertainment artists, rather than contractors, and treat them with a high degree of respect as the talent in the industry. We offer fair and equitable financial participation upon success, IP ownership and creative control to the developers, branding of the artists above our own label at all times, and a high degree of involvement in the PR and marketing campaigns for the games we publish. In short, we check our ego’s at the door and defer to the guys who live and breathe games and game development, rather than assert our own opinions and power just because we are providing the financing.
While there are other independent-minded publishers out there, most are under-funded and focus on smaller, niche titles and often do not have the financial wherewithal to handle big titles on a worldwide basis. We aim to fill the huge gap that exists between these little guys and the behemoth public companies. Our motto is “Indie Label Spirit, Major Label Muscle.” We want to be the most attractive avenue for any strong independent developer to reach their audience with the fewest artificial roadblocks inserts as possible. In short, the dream publisher for an independent developer, since Harry Miller, Rick Stults and I all have experience in managing these teams, and have a unique understanding of what they want and do not want from a publisher.
And, finally, since we’re private and operate a very tight ship overhead-wise – more like a movie production company than a toy company – we can turn a nice profit on a lot less units than our public rivals, who are forced into the “scale’ model by Wall Street. That, coupled with our team’s excellent track record in identifying new hit properties from up and coming teams, provides us with some great advantages when it comes to bringing in the “sequels of the future.”
DFC: For those who haven’t heard you answer this question before, is Gamecock Media in a way Gathering of Developers Part II? How is it different based on what you learned before?
Mike: Philosophically, we are very much the same; Practically, very different. We didn’t give away more than half of the publishing company to “founding developers” this time, as we found that not to be necessary to get them to participate in our model this time around. That’s partially due to the fact that we have a reputation with developers worldwide and have done this before, but perhaps even more due to the sad state of affairs in the industry with regard to the big publishers ability and willingness to take chances on original games, particularly if they aren’t formulaic. We are much better funded this time, and not from a competitor, therefore our funding comes with a lot less strings. All our funding at Gathering came from a very cash poor, pre-GTA Take-Two last time. We are also able to publish games for all platforms, whereas our deal with TTWO before had us tied to the PC platform, which was clearly giving way to the consoles in terms of mass audience.
DFC: You’ve been in this business a long time, and have taken a lot of chances along the way. What will you never do again?
Mike: Well, I’ve learned to never say “never”, so that might kill the rest of the question. We continue to follow our instincts and take chances, we believe that to be our core competency, and our track record is stellar. Nearly everything we did as Gathering of Developers made money, and we had 8 million-unit-plus selling franchises developed in less than 3 years, almost all of which came from unknown teams with new IP. Our marketing and PR work is honest, and seems to resonate as such with the gaming community as well as with developers, retailers, and the press.
I suppose if anything, we’ve learned to not be too dependent on any one deal or relationship or title, to spread and balance the bets a bit more, and to always expect the unexpected with regards to partners.
DFC: In the movie industry you see a great deal of access to different funding sources. This means adventurous independent films can often be made without having a Wall Street stock speculator breathing down your neck. Do you see a similar trend starting to occur in games? What sources of funding is Gamecock looking at?
Mike: Absolutely… this is what got us funded and the most exciting development, in my mind, in many years for this industry. Most of the problems we’ve seen in creative stagnation, me-too games, etc., have come from the fact that all the green-lighting is being done by a few big public companies with very similar issues to face: big overhead, the companies being managed by executives completely divorced from the actual medium – guys who play golf, not videogames – and overall sloppiness that comes with the scale model that Wall Street has demanded out of what I call version 1.0 of Game Publishing.
These same issues were facing the filmmaking world 10 or 15 years ago, and so the talent found other sources of funding. The independent film movement is proof positive of what new blood, and new money, can do for creativity, and that mainstream success can come from the most unexpected places. Recent examples include Little Miss Sunshine and Napoleon Dynamite. Similarly, the huge franchises the giant publishers now depend on were almost all at one time born out of a small independent studio somewhere. There is big money in having your ear to the ground and being in tune with what the talent of the industry wants to do.
After nearly two years of looking, we figured out that the only ones from outside the industry who would be okay with the risk profile of making games – just like TV or films – would be people that had already invested in other entertainment/IP areas and had gotten over the “all or nothing” nature of it, or the many International film – and now video game – funds, where investors take more risk because it’s a tax write-off. Many of our developers have been partially funded by such funds, and new ones are springing up every day.
Harry Miller
Products
DFC: Please explain your philosophy behind the games you choose to publish? Can you tell us a little bit about some of the products you have in the works?
Harry: Our philosophy behind a game we select is based on the following criteria:
• Do we like it and would we play it? If we as gamers don’t like the game, there is a good chance that others won’t as well. It is important to note that we lean toward the hardcore gamer market.
• Do we believe the team can execute on their idea and ship a quality product? Ideas are a dime a dozen, and the last 10% in the development process of a commercial product is the hardest part. We look for teams who can demonstrate that they understand the difficulties that are before them and will be able to deliver the product that they are pitching.
• Do we believe that the team is excited about making the game? Again, making a game for commercial release is extremely difficult and it is important to us that the team is going to put in blood, sweat, and tears to make the very best that they can.
• Does the game stand out? We don’t want to work with clones of other products. The game should introduce something new and exciting into the genre and/or fix flaws in the genre, and in some cases introduce a new genre.
• Do we think it will do well in other territories around the world? Games are quite expensive and most games will not be profitable if we sell it exclusively in one territory. We definitely think about which territories the title will do well in and what it will take to get the game into one territory or another.
• Will retail support it? Even if all of the above are true but retail won’t put it on their shelves, we probably won’t select the title. An example of where this could be true is Porn.
• Cash flow. Unfortunately, we can’t afford to fund every game that we like. As in any business we have cash flow to be concerned with. The game budget has to meet our ability to fund. In addition there are probably other games competing for the same financial resources. We may pass on an opportunity to work with a really good game because we chose one we feel is just a bit sexier and/or makes more sense for our company.
DFC: In one week Halo 3 launched in nearly 40 countries and in 17 different languages. How much are you considering the International market in choosing the titles you intend to publish? What impact does the growth in the global game business have in your business strategy? Brazilian beef launch party anyone?
Harry: Generally, games are international products and we certainly take into consideration a game’s potential in other markets besides North America: the USA, Canada, and Mexico. Western Europe is especially important to us, which is primarily due to the size of the market and taste in games. Western Europe can make up roughly 30-60% of a game’s revenue, depending on the genre and platform. Outside of Western Europe, we sell our games throughout Asia, Eastern Europe, Russia, Latin America, Australia, New Zealand, South Africa, Israel, and others.
DFC: Is Gamecock partnering with local firms for distribution in foreign markets, or are you developing your own overseas distribution/marketing teams?
Harry: We do partner will local firms in each country, as most markets cannot support the cost, time, and energy that would be required of us to have a local presence. Because of this we look for partners who are like-minded, respected, and dynamic. Because Western Europe is so important to us, we are opening an office in London within the next year. With an office in the US and Europe we will provide a better service and financial return to our development partners, investors, and company.
DFC: Are you working with any foreign developers today? If so, please tell us more. If not, do you intend to do so in the future, and under what circumstances?
Harry: Of course we work with foreign developers, as of today that includes Firefly (UK) www.fireflyworlds.com, Cro-Team (Croatia) www.croteam.com, Auran (Australia) www.auran.com, and Replay (Germany) www.replaystudios.de. There are others but we haven’t announced them yet. Just as games are International products, developers can be International suppliers.
Rick Stults
The Business
DFC: Marketing and distribution tasks can overwhelm small publishers, and even the large media companies with plenty of resources like Time Warner and Viacom. In either case, the answer is to partner with one of the primary game publishers. The large game publisher’s biggest strength seems to be marketing, distribution, retail relationships and managing licensed franchises. Being able to develop high quality-games does not seem to always be a necessary prerequisite to success as a publisher. Assuming you can develop high-quality, innovative games, can you handle the other roles of a publisher on your own? Even GodGames had to partner with Take-Two. Can you avoid partnering with a publicly traded game publisher who will make you a slave to the investors and penny-pinchers on Wall Street?
Rick: Absolutely we can and are handling these roles. One of our core business philosophies is to be a company others want to work with. It starts first with development studios, but it carries over to our business relationships too. We work direct with some retailers; we have solid partners for distribution, sales, PR, and marketing. These are vital areas in the overall success of each title and we work hard to give each game the best shot at success. Back in the GodGames days we partnered with Take-Two to raise capital, not because we were overwhelmed.
DFC: There is a lot of criticism about me-too products, licensed games and uninspired sequels. However, the issue with these products is that often times they sell. Maybe it is not so much the industry that is at fault, but the consumer. Could it be that most consumers are just too afraid to try anything new and different? How do you get consumers to be more adventurous?
Rick: I think consumers have no problem trying something new and in most cases don’t get enough credit in the process. If a game is a fresh new idea that is made well, and more importantly, fun, they’ll buy it. The problem is they are force fed the sequels and licensed products since those are the properties the big companies put a lot of money behind and most of their marketing push. It’s our job to introduce the original titles and great development teams we’re working with to the consumer.
DFC: There is a perspective today that there is no longer a place in the business of mainstream video or PC games for independent developers. The money just isn’t there to cover production costs. Barring a publisher like Gamecock, what is the state of independent development today, and what are the prospects for the future?
Rick: We’d like to believe it is not all riding on us for the independent developer, but if that’s the case keep checking in with us as great games will continue to fill the pipeline. Production costs are rising, but how can there be no place for something original created by an independent developer who’s passionate about the project they are working on? It’s not an easy road, but we believe games from the independent studios are what consumers are wanting.
DFC: There is a huge range in development costs in today’s market, from low cost casual oriented fare that can be digitally distributed towards your big PlayStation 3 product where development budgets in the $20 million range are becoming increasingly common. Where would you see your current and future products fitting in that range of the spectrum?
Rick: Bottom line is we’re interested in signing games that will make money, so you’ll see products from us all across the spectrum. We plan on exploring all game types and distribution models.
