Noted enemies-of-freedom Clinton and Lieberman are at it again.

You know, I really don't like living in a country where citizens can be held indefinitely without trial on the president's say-so, the feds can issue orders for your private information under a ban of secrecy that doesn't allow people even to reveal that the order exists--and where something as harmless as a game is viewed as needing the kinds of controls we apply to addictive, life-threatening drugs.

When I was young, I lived in a free country. I'd like to have it back, thanks. A pity neither party apparently believes in freedom any more.
posted by Greg at 11:01 AM 3 comments

Holy crap...

I was emailing Rick Goodman this morning (to ask him for connections to Boston-area early-stage VCs and angels) when the email bounced... I figured okay, it's been a couple of years since I talked with him last, people do change email addresses, if only because the old ones start filling up with spam... And went to look at the Stainless Steel Studios website... to get an "Index of /" screen with no content. WTF?

A web search led me to this thread on Heaven Games... apparently Midway pulled the plug and Stainless Steel Studios ain't.

Daniel Higgins posted:

This is true, SSSI is no more. I can't give details as to why, but I can tell you the product is in excellent shape, the team was in high morale and plowing ahead at full steam, and we were just weeks from gold disk.

When making games, not all factors are under your control. If one of those uncontrolable factors are important to your company and product, and fails you, bad things like this can happen. It's an unfortunante part of life. You can only learn from the experience, hopefully educate others on your experiences, and everyone in the games industry gets stronger as a result.

Still, this is truly a dissapointment. The talent of our team was incredible, the synergy we had, amazing. We would have been a gold-mine pickup for one of the bigger publishers if they wanted a top-notch RTS game company under their wing.. but alas... People are spreading to the wind now, unfortunantly seperating some amazing talent that worked on, what I feel is one of, if not the most, modern RTS Technology in the industry. 7 years, and.. hmm.. something like 70 programming years (man years) put into the product.

If Rise & Fall is released by someone else (its just a few bugs from finishing), you guys will love it! RAF is an RTS evolutionary game, and its a shame we won't be around to write its XPacks and sequels.

I think the biggest loss here is the fans who love RTS. The death of our AAA RTS company means 1 less team driving to increase the industry's limits. It means 7 years of technology and the team who knew it like the back of their hand, put on the shelf.

I feel bad for you guys. :-(

As for me, I'm not sure which direction I'll go yet, but I'll let you guys know in a week or so where I'm heading off to.

This makes no fucking sense to me. Yes, the plug gets pulled on independent developers all the time, but we're talking about Empire Earth, fer chrissakes. I would have thought that was a viable enough franchise. What's wrong with this industry? (By the way, check out that link--the Soviet tank commander appears to be Rick Goodman, which is kind of funny.)

Update: A correspondent writes:

"To clarify, we weren't working on the Empire Earth franchise, but new IP.... Sierra has the EE rights, and EE 2 was done by Mad Doc, a different Boston-area developer."

Well, yes. I should have known. Doubtless they had to sign away the IP to EE to get published. And this makes marginally more sense, as "original IP is risky." Never mind the proven quality of the team. Still makes Midway out to be morons, in my book.
posted by Greg at 1:19 PM 5 comments

So Eric the Z has posted his Game Developer's Bill of Rights on Gamasutra; it's modelled on Scott McCloud's similar screed for comic creators. I thought I'd go through it and comment.

1. The right to full ownership of what we fully create.

Retain ownership of IP, in other words. Absolutely, if you can, which in current circumstances means "if you can fund your own development." And even then you'll have to argue.

2. The right to be billed as the game creator in marketing and on game packaging at least as prominently as any mention of the game publisher.

I'm on board here... Although I do want to know who Eric thinks is the "creator". The studio, presumably, but I'll note that's pretty odd by the standards of other media--and not necessarily a reliable guide, as people join and leave studios all the time, and the studio name isn't necessarily a reliable guide to quality. "Sierra" once meant something good, and now means something pretty skanky... I'd love to see the industry adopt a standard of mentioning lead designer, tech lead, art director, and lead producer when talking about games, since those are generally the key talents. With film, we do talk about director, producer, lead actors, and screenwriter, after all.

4. The right to move freely between publishers on new game projects.

Well, I know writers who actively like getting multi-book contracts. Yes, you want to avoid the common music industry practice of forcing artists to sign up for many multiple albums, but otherwise I think this is a matter of negotiation. There's a certain peace of mind in knowing you've got funding and an outlet for multiple projects.

5. The right to a fair and equitable share of profits derived from a game.

Heh. That would be nice. Of course what constitutes "fair and equitable?"

6. The right to full and accurate accounting of any and all income and disbursements relative to our work.

Sure. So negotiate for a clause allowing you to inspect the books, and spring for an accountant to do so. And, ah, try not to do business with people you suspect are thieves.

7. The right to promote and the right of approval over any and all promotion of our games and ourselves.

Actually, I disagree. Marketing is the publisher's job, and they shouldn't have to get your approval on every press release. I'd rather go the other route--at least negotiate for the freedom to be able to say whatever you damn want about the game yourself, instead of having to have everything approved by the publishers PR group.

8. The right of approval over means for distribution, as well as for licensing, merchandizing, and other derivative versions of our games

Over distribution, no... so long as the division of revenues is clear, publishers should be free to find whatever avenues they can. As for sublicenses, sure--and the developer should get a reasonable share of the revenues derived therefrom.

9. The right to a publishing arrangement that reflects the iterative nature of game development; one that recognizes that changing a game as it is developed is part of creating a game.

Sure, although I'm having a hard time imagining how that contract works--that is, how it can both allow for sufficient flexibility and still hold the developer to reasonable performance goals. I'd like to see some contract language here.

10. The right to a publishing arrangement that results in a process that conforms to accepted standards regarding work hours, compensation, and labor practices.

I assume the scenario this addresses is "publisher makes unreasonable demands, forcing developers to work huge number of hours." It happens, to be sure. But there's two sides here; if a developer is so badly organized that they need to work long hours to meet reasonable miletones, that's surely not the publisher's problem. I'm on board with the objective, but how it works in practice I'm not clear on.

11. The right to acquire publishing rights to a game if the publisher has stopped distributing the game.

Right of reversion, in other words. If you own the IP, it should be possible to negotiate this. Of course what "distribution" means in this context can be tricky... "It's still up on GameTap, and still for sale, even though we only sold two copies last quarter."

12. The right to employ legal representation in any and all business transactions.

Not sure what Eric is getting at... Has anyone ever told him he can't have a lawyer look at a contract? That's crazy--and illegal besides. But maybe he's concerned about mandatory arbitration--which has good points as well as bad points.

13. The right to final say in creative disputes regarding the game.

Good-oh. But good luck negotiating that, too... unless you can self-fund of course. To be sure, it's awfully hard to stick with. "Oh, you're totally ignoring our advice and doing the game you want to anyway? Okay. Well, I think the result is that we now have absolutely no confidence this turkey can sell, so we're reviewing our marketing and promotion budget. I think zero sounds good. What, you don't like zero? But the game will be so great as a result of your decisions that it'll sell itself, right? Oh, you want to reconsider, do you? Well, let's talk about that."

But by and large, it sounds right to me. Not that EA is going to announce they're adopting it. But I think Manifesto will pretty much adhere to it.
posted by Greg at 5:19 PM 4 comments

We had an IRC meeting on Monday with the guys working on site development, and I think we're a little better organized--and making progress.

We now have more than a dozen LoI's from developers in hand, expressing interest in working with us. And an LoI from the Independent Games Festival toward a co-marketing arrangement, which could be cool.

And we have $125k committed from investors toward a $1m round--still a long way to go, but a start :).
posted by Greg at 4:56 PM 5 comments

Goodbye Firaxis.

And to be sure, here's hoping Jeff and the gang made off personally well in the sale. (Hey, Jeff? Want to invest in an operation devoted to ensuring that developers don't have to do this in future?)

And yeah, deal terms are not public, and I have to assume that Firaxis shareholders get decent money as a result. But I also have to believe that Sid Meier works better when he has control over what he gets to work on, rather than having to answer to some twit more concerned over the quarterly numbers than actual game design. And I very much doubt that Take Two will be interested in financing another Gettysburg. Or a CPU Bach.

But yes, the dev costs keep going up, and you either have to do a Bioware/Pandemic or sell out, at some point. There ain't no future in independent game development.

But there should be.

But then, I guess you've heard this rant before. Mumble ratsenfrchresenfurffmble mumble. Sigh.
posted by Greg at 12:33 AM 6 comments

So I imagine most readers have seen the news; Bioware and Pandemic have agreed to merge, with $300m provided by Elevation Partners.

Bioware is, of course, one of the gems of the industry, a company I certainly think of in the same frame as Blizzard, producing a series of excellent RPGs. Pandemic is newer, but has certainly done good work. And Elevation.... Elevation is a private equity group with more than $1b under management, with both Bono and John Riccitiello on its board. They made a bid for Eidos some months ago, but were outbid by SCi (which is now looking for a buyer itself... remains to be seen whether their purchase of Eidos was a net positive or not).

But I'm not here to report on that; I'm here to comment, prognosticate, and provide my usual dyspeptic view.

Both Bioware and Pandemic are successful as independent developers, at a high level--enough that they've been able to fund their own development, which is huge. It's basically impossible to escape a hand-to-mouth existence, as an independent developer, without that. So why should they feel the need to do something like this?

The answer, I suspect, is: AAA-level development for next-gen consoles requires eight-figure budgets. They figured they needed access to more capital if they were going to remain independent. So the deal with Elevation makes sense; they get deep pockets, Elevation gets a stake in companies that probably can do well in the next generation with access to enough capital, everyone is happy.

Except that--well, nothing comes without strings. I don't know what Elevation's ownership share in the new operation is, but I imagine they are in the controlling position. Capital generally is. And I'm sure they've assured both Bioware and Pandemic that things won't fundamentally change, and that both groups will be basicaly able to operate as they have in the past, and make their own decisions.

And yet...

Riccitiello comes out of EA. EA is known for taking over independent developers... assigning them impossible-to-reach goals... and then gutting them when they fail to reach those goals, moving what remains of the team to Redwood Shores, and taking over their IP.

And Riccitiello himself--once spoken about as a possible future CEO of EA--was forced out a couple of years ago. Because he ran EA.com, possibly the biggest boondoggle of EA's history, an operation that lost in excess of $150m pursuing the goal of subscription-based multiplayer Internet games. After EA gutted both Origin and Kesmai (a/k/a EA Northern Virginia), two operations with enormous, long-lasting, and deep experience with subscription-based, multiplayer games. A finer example of corporate arrogance would be harder to find: EA had, in house, enormous experience with the field, and chose to blow it off, in favor of letting a golden-haired boy of upper management do something else entirely. With predictable results.

That golden-haired boy is now in charge of the new company.

So yeah... In part, this is an example of the kind of thing I've been talking about: independent developers need to find a way to fund their own development, or they are at the mercy of the publishers, and this kind of thing is about the only way that independent developers can continue to play in the mainstream industry and remain independent.

On the other hand... Well. Based on interviews and reportage, both Bioware and Pandemic are chuffed and positive about the deal... But I'm a pessimist by nature, and I rather expect a shoe to be dropped down the line.

But yes, I could be wrong. Possibly Riccitiello has learned by experience, and possibly Bioware and Pandemic's management have a superb working relationship with him, and all is for the best in this best of all possible worlds.

In which case, btw, look for an IPO of the new company within a few years. When you come down to it, Elevation is a VC, and they will want their liquidity event. Which can only come from selling the company (and these guys went into it to preserve their independence), or via an IPO.

And if all works well, and they launch next-gen titles that do very well, they will likely have the revenues to support an IPO on favorable terms.

Or it could all turn into a nasty clusterfuck. Have I mentioned that I'm a pessimist by nature?
posted by Greg at 5:51 PM 4 comments

Something I haven't seen mentioned anywhere else, which deserves some notice:

Jagex is the company that operates Runescape, an MMO that operates in the browser via a Java client. Ads are served during play; it's free to play, but access to a slew of additional content is available only to subscribers, with subscriptions at $5/a month. They claim 5m registered users, don't know how many subscribers but their site says they're pushing to enlist 400,000 by end of 05. All fine so far, but...

alarm:clock recently reported that Jagex has received an "undisclosed" investment from Insight Venture Partners.

What's interesting about this from my perspective is that Insight has $1.5 billion under management--and a fund that size just does not make investments of less than $10m, and $20m would be more typical. So very likely, Jagex--running a goofy "niche" MMO below the radar of the rest of the field--has closed on an impressive amount of capital, which should certainly give some hope to, say, the Three Rings of the world.

Of course you might ask: Why do you think $10m is probably the minimum investment?

To answer that, you have to understand something about the venture capital world. A VC firm has some number of "general partners" (the guys who actually make investment decisions); "limited partners" are not involved in the day-to-day, but provide the actual capital that the firm invests (though general partners may put up some money too).

Each new company you add to the firm's investment portfolio takes some GP's time and energy to track--to stay involved with management, attend board meetings, provide assistance, and so on. And of course there are limited hours in the day. So well-managed VCs try to limit the number of portfolio firms each GP has to oversee--typically to a number somewhere between 5 and 10 (and if you're pitching to a VC that goes over that number, don't expect much attention or help from them down the road).

Of course, you can add more GPs to invest in more firms--but by agreement with the LPs, the GPs are entitled to a fixed percentage of whatever profits the firm makes. Adding more GPs means you have to share that percentage with a larger number of people--and a VC firm with too many GPs becomes unwieldy and slow moving, which is not a desireable trait in venture capital. So most VC operations have fewer than a dozen GPs, and even that's a high number.

Thus, all things being equal, the larger the fund, the larger, in terms of dollar volume, each investment has to be. An operation like Insight basically can't afford to make investments at the $5m level--unless they are extremely hot on something, of course, and even then, they probably won't agree to look at a company that's going out for less than $10m.

I do note that the story about Jagex mentions no other investors, so the likelihood is that Insight decided to plunk for the whole round--so perhaps it's on the low end of their usual scale. That's a double-edged sword for management, by the way--it means they don't have to hold the hands of a lot of different investors, but it also means that they have no chance to play investors against each other if there's a disagreement. If Insight says "jump," Jagex will pretty much have to act like a frog.

Interesting nonetheless.
posted by Greg at 3:33 PM 5 comments

So that was fun.

I woke at around 5 AM this morning, as I often do when I have to speak that day. And a good thing I did, as iBreakfast's "instructions to presenters" email was in my in-box, advising me that presenters had four minutes--meaning I had to cut down my presentation by quite a lot, turning it from a normal investment presentation to a "speed pitch."

The format was this: six presenters, each limited to five minutes, with commentary from a panel of three VCs (Steve Brotman of SAVP; David Rose, one of the founders of the New York Angels, and M. J. Segal of Joshua Capital); at the end of the presentations, they would choose a "winner", who would be invited to present at the New York Private Equity Forum. Kind of silly, in a way--the idea that there's a "winner," I mean.

The presenting companies were a mixed bag; Switch Mobile, an MVNO; Fotki, a Flickr competitor; Good News Broadcast, which I couldn't figure out even after their presentation; China Directory Publishing, which claims to have an deal with the Chinese government giving them exclusive rights to publish b-to-b directory information; and 401kid, which provides some kind of solution for education savings plans. And Manifesto.

With the exception of Switch, all have revenues and have been in business for some time--and we, of course, have been in business for a month. Fotki was selected as "the winner"--but there's no doubt in my mind that the Manifesto presentation was the slickest, clearest, and best organized of the lot. Rose, whose reaction to another presentation was "I want to strangle you--your business might be interesting, but I really have no idea what you're trying to do", seemed to agree, and invited me to submit to the New York Angels (which I had planned to do anyway, of course). Alan Brody, who runs iBreakfast, said "Our first real speed pitch!"

They did have one useful suggestion (include a diagram of "the long tail," since not everyone is familiar with the concept), and a couple of questions--"what's the business model" and "what do you bring to developers" (application rev share; marketing support and access to customers who might not otherwise encounter them). Both reasonable questions, and both I thought obvious enough that being specific about them wasn't essential, and in five minutes, anything not essential must be pared.

So on the whole--a useful first outing, providing some confidence that at least we know how to pitch what we're doing in terms comfortable for VCs.
posted by Greg at 12:12 PM 4 comments

Hmm.... and it appears I'm pitching at iBreakfast tomorrow... Good of them to give me 14 hours notice, heh. And lucky that I spent much of the day working on a pitch presentation...
posted by Greg at 5:19 PM 7 comments

Congratulations to Adam Snetman, and condolences to everyone else--and many thanks for those who participated.

I know some folks preferred others--I chose this for a number of reasons. First, it's very clean, and useable in a lot of different ways, against different backgrounds. Second, a logo needs to be used in a lot of different ways--large, small, on cards, on stationery, on the web--many of the other contributions would be hard to scale and still be obvious what they are. The one point that made me waver on it is that fact that is is as clean as it is--it is pretty corporate, and corporately, Manifesto is pretty "in your face." But I figured, well, we're going to be "in your face" in other ways, the logo doesn't have to be that way, too. And clean is good long term, anyway.... someday doubtless they'll pry the Molotov cocktail out of my fingers and make me wear a tie.

Everyone in creation is sold out of the Xbox 360, so he may have to wait a bit, although I'll check brick and mortar on the on-sell date... And it may cost me a bit more than anticipated, since they're clearly gouging on bundles. But hey.
posted by Greg at 4:23 PM 6 comments