A question for those who work in publishing

There's something I don't understand about software publishers at the moment, and it is this:

* It's clear as glass that the business is becoming increasingly difficult in publishing because of costs. Even EA are spending a massive amount (slightly less than a billion) in development next year, and there's no end in sight.

* It is clear that this is caused by the generational leap. Said leap being brought about by three hardware companies changing the rules on the publishers. The so-called generation cycle is primarily driven by oligopolistic competition between the main players, and this means that their priorities effectively dictate the business of everybody else, and also take the lion's share of the profits.

* This places the manufacturers in the increasingly envious position of being the only ones who can afford to spend money on new and interesting projects, as they make the most profit from their release per copy (not having to pay a license fee to themselves) and can afford to pay for them from everyone else's hard work.

* In short, meaning that the 3rd party publishers are slowly getting boned by being unable to compete.

Here's what I don't understand. Why aren't the likes of EA and Activision actually doing something about this, either through some sort of collective pressure, through the spectre of legal action, through anything that would establish a market and lessen the oligopoly's hold? I don't understand their inaction.

In the film industry the content owners have commonly exert their influence in the market to bring about such things as the DVD Forum because they realise the value of collective behaviour on issues that affect them all. Why aren't the non-manufacturer gaming publishers doing the same?

The Expectations Trap: Halo 2 and PS3

I know that it's bad form among the gaming cognoscenti, but I really like that Halo 3 trailer. I know it's a trailer, I know it's video and not the real game, I know I know. But oh my what wonderful music, what swells of epicness and portentous quotes of "This is the way the world ends." I also know full well that the trailer is pretty standard stuff, what with the flickering Cortana intimating that there's elements of the Master Chief's past involved, every trilogy ends at its beginning and so on and so forth.

But the thing is.... Well, I have a confession to make.
I loved Halo 2. But it's a lesson in what happens when the expectation machine goes awry. As is the PS3.

I truly loved Halo 2. In some circles, that's enough to end a conversation right there, with a volley of "How could you not see its shortcomings, the failure to meet expectations, the cheese, the blah blah blah". I loved it. I loved the levels, I loved the visuals, I loved the two-weapon thing. I loved the Arbiter sections. I wasn't so sure on one or two of the mechanics of the game, and I thought the ending was a bit "Time Gentlemen Please!"

But overall, I loved it. It was my favourite game of 2004 by a considerable margin because, warts and all, the fact is that it was the game that I wanted to play when I got home from work, the pub, whatever. I simply loved it. I should add here that I'm mostly talking about the single-player game, not the multi-player which I only had marginal contact with as I don't have Xbox Live.

Reactions to Halo 2 really confused and angered me at first, because they varied so wildly. Some people seemed to dig it like I did, but there was a lot of negative reaction out there. Some people talked as though the game had been a complete horror of Driv3r proportions, that it was such a disappointment, a let-down, whatever. I felt bad for the guys over at Bungie. I mean here was a game that had been whooped and hollered at the year before at E3 with that gameplay video,
with all of that stuff included, and the reaction of the gamer community was totally overblown in the negative as though the game were a crime.

Driv3r WAS a crime, not least against journalist's review standards, but Halo 2's crime was simply this. It was an excellent game, but it did not meet up to some gamers' expectations. It must surely rank as one of the greatest cases of inflated hype meeting reality in modern gaming, and it shows how dangerous playing the expectation game really is.

And the reason for this is simple. Expectations are a fantasy. Sony are currently experiencing the brunt of gamer wrath in much the same way, now that it has become apparent that the PS3 may well be an empty shirt after all. Some of us knew (or strongly suspected) of course that the purported games of last year's E3, most especially Killzone 2, were likely to be nothing more than animation videos, but the bomb that they set off was enormous. And now the backlash is coming thick and fast.

My overall point in this ramble is that we gamers (and we game developers too) have a tendency to fantasise, and a common trajectory of that fantasy is that the final product never lives up anywhere close to our expectations. It's as I wrote a long while back in my essay 'The Gamer's Dream', we are very prone to an idealistic take on the world of video games, always reaching for the belief in the perfect game.

In the real world, nothing can ever hope to reach that. Try as a company, developer or artist might, playing the expectation game can never successful. Especially not when you put out the key features of your new product a long time before release. Microsoft's big mistake with Halo 2 was that they released their footage so far in advance of the release that it built up to messianic proportions. Sure, they sold 6 million or so copies in the process.

Now they'll find that they have a harder sell with Halo 3. Now we are "post-expectation" when the expectation has become one of failure in some peoples' minds. Unlike the idealistic expectation, the failure expectation is one that is always achieved. That is the expectation of looking for the bugs and the cracks. I loved it, I love that trailer with its wonderful music etc, but I already know that the cat-calls will start. Halo 3 is destined to be an argument.

As for PS3, the news seems worse if anything. Reactions to the Sony conference have ranged (from what I've read) from muted apathy to staggering disbelief at the price, the gimmicks, the two versions, the joypad, the marketplace, and the lack of decent gameplay footage a mere six months before launch. And no sign of Killzone 2. Sony have committed the grevious error, like Microsoft did before, of shooting their load way too soon and, unlike Microsoft, appearing to not have the goods to back their original hype up after all. In the course of one 48 hour period they've gone from hero to zero.

Now the expectation is that they'll be on the back foot from here on out, relying on their 'brand' according to some journalists. Well brands change and shift in the public consciousness all the time, and that comes chiefly from reputation. They've handed a massive fall in expectations to the magazines, the gamers, the podcasters, the bloggers, everyone. For the next six months the story about Sony is going to be how can they compete against either Microsoft or Nintendo where it counts, why would anyone want and PS3 now that GTA4 is multi-format with Live exclusive content, and the expectation becomes 'waiting for the inevitable'.

These are not mountains that are easily climbed.

The Growth Gamble

Hey, have you heard the news? Apparently development costs keep on rising, and there's more rises down the line with next-gen technology virtually guaranteeing teams of over 100 as necessary now. You haven't heard the news?

Well apparently neither had Michael Pachter from Wedbush Morgan Securities until just recently when EA announced that their development budget forecasts for 2007 are expected to hit $900 million dollars, compared with $758 million for 2006 and $411 million in 2003. (source: gamesindustry.biz) Pachter apparently describes the $900m as speechless, and complains about the sustainability of it. EA's answer? They expect large growth. Pachter forecasts $3.46 billion in 2008.

This seems to be the answer for a few of the big companies now. Don't worry, it'll all turn out well in the end because, in case you haven't heard, the games industry is growing by 500% every quarter and will soon become the biggest baddest medium in the world and so on. As many others have pointed out, the 'eternal growth' model of the industry is predicated on one of many myths, the chief one being that the industry is in fact a big mainstream medium now.

Rant over.

Why the Games Industry Needs a Union

Class action lawsuits seem to be creeping out of the woodwork, so far mostly in the US EA's just had a couple, Activision seem to have one or more on their hands now, and these are the ones that we know about. The reaction from publishers is pretty much what you'd expect (according to friends on the inside etc), which is to implement overtime policies in those specific areas that have resulted in legal damages, while at the same reinforcing the no-overtime-here policy in their other territories.

It's all very legal, but these being the days of email and web-based news, of course the news gets out there, leading to more grumbling and - no doubt - more lawsuits in other territories. The terror of outsourcing might serve as a discouraging whip for some, but in the long run that is just another mitigating strategy. Putting off til tomorrow what is hoped will not surface today etc.

What we're looking at here is a big mess, in otherwords, and it could very easily become an acrimonious mess (it arguably already has) that continues to drive talented people out of the industry into other fields, propagates worsening conditions, and continues to effect the downward spiral of the quality of the industry's output. And therefore ultimately hit the bottom lines of these companies.

It's for reasons like these that the game industry needs an effective union.

You might point to the IGDA as the game industry's equivalent, but the IGDA is not really a proper professional organisation. It's full of academics and students, which tends to dilute any sort of professionals-only issues, and it is less concerned with action that advocacy. The IGDA is essentially a valuable research and debate organisation, but despite several calls from within its ranks and from the outside as well, it has on several occasions specifically said that it will not take on the mantle of any kind of union organisation.

Unionisation conjures up a variety of Dickensian misery or Arthur Scargill-style strikes (see here if you don't know who Scargill is), combined with suspicions of socialism. It also conjures up fears for jobs, in the sense of companies adopting no-union policies, outsourcing, the fear that unions automatically mean strikes, and so on and so forth. These images may well have a place the developing world and manual labour industries, but not in the modern world of technology and knowledge workers.

Many high-skilled industries have unions although they are often called something else. An example are the Writer's Guilds that cover the field of screenwriters working in television and film. Another is the International Union of Operating Engineers, or the Union of American Physicians and Dentists.

These are professionals-only unions, essentially, and their job is to negotiate on behalf of professionals for their fields. Unlike a miner's union or manual worker's unions, professional unions tend to be light-touch, negotiating in areas of importance while retaining the flexibility for individual workers in their field to negotiate on their behalf.

A manual labour union will often heavily negotiate for pay increases, ranks of pay, hours worked, working practises and that sort of thing. These kinds of unions are essentially trying to nail down every aspect of their profession and obtain what they think is a fair deal across the board for their members.

A professional union, on the other hand, doesn't take such a heavy handed approach because that approach is not what their members require. What they require is representation in key areas, but independence in many others. The Writer's Guild of Great Britain, for example, negotiates basic rates with the BBC and other major media organisations for individual writers. Under WGGB regulations and negotiations, the BBC are mandated to pay a certain minimum amount to any writer. However, the WGGB does not dictate terms outside of those minimums. Writers are free to negotiate for themselves, and working practises are frequently left to their own discretion.

Another thing that the WGGB does, which is also common to professional unions (especially in contract-based industries like the games industry is slowly becoming) is that they organise help and relief for members. Writers, in this case, are not the sort of people who work consistently, so obtaining health insurance or mortgages can be very difficult for them.

These issues are becoming more pertinent for the games industry, especially when the current trend of campus studios starts to falter. The industry is currently consolidating a lot and trying to internalise studios all over the place into giant places like EA Vancouver. But the day will come, and not too far off, when EA and the like realise that this system is an inherently flawed way of working because it lacks necessary flexibility in a world of fewer, more high profile releases. It's a lesson that the film industry learned a while ago, and it's coming our way too, probably within 3-5 years.

The real issue is that it's becoming more and more in the publisher's and manufacturer's interests to support an unionised industry than not. While on the surface that may seem like a perfectly insane statement, there is a logic to it. As lawsuits continue to gather pace, this means that the various companies are going to come under attack. Bad press for shoddy treatment of workers is not one of those things that is easily spun, and with every case making its way into the headlines, another company takes a hit on its stock rating, becomes a place that high-profile candidates are less likely to want to work, and overall a bad reputation carries. The best way to avoid all this mess is to draw a line under it by negotiating an agreed set of fair guides that both employees and employers can live with. That means that the employers need someone to negotiate with.

Some thoughts on how to shape an industry union in a few days.