Se cr e t s of t h e Ga m e Bu sin e ss by Francois Dom inic Laram ee ( ed) Charles River Media © 2003 ISBN:1584502827 This book unveils t he inner workings of t he flashy but very serious gam e developm ent and publishing indust ry Everyt hing is covered, from how t he ret ail m arket works t o financing a st art - up and deciding on t he right business m odel for your gam e Ta ble of Con t e n t s Secret s of t he Gam e Business Preface Se ct ion - Pu blish e r s a n d D e ve lope r s Chapt er 1.0 - I nt roduct ion Chapt er 1.1 - The Top Ten Misconcept ions New Gam e Developers Have About Publishers Chapt er 1.2 - The Role of Each Ent it y in Gam e Publishing Chapt er 1.3 - How Developers Get Paid: The Ret ail Market for Gam es Chapt er 1.4 - A Publishing Proj ect : From Concept t o Launch and Beyond Chapt er 1.5 - The Producer, Friend or Foe? Chapt er 1.6 - The European Challenge in Videogam e Soft ware: The " French Touch" and t he " Brit soft Paradox" Se ct ion - Ga m e D e ve lopm e n t St a r t u ps Chapt er 2.0 - I nt roduct ion Chapt er 2.1 - Developm ent Misery and How t o Avoid I t Chapt er 2.2 - Writ ing a Business Plan for a Gam e Developm ent St art up Chapt er 2.3 - St rat egies for St affing a St art up Chapt er 2.4 - Financing from t he Buyer's Side: Evaluat ing and Acquiring a Gam e Com pany Chapt er 2.5 - Financing Proj ect s and St art ups Chapt er 2.6 - Wireless Business Models Chapt er 2.7 - Online Business Models: Using t he Net for Profit Chapt er 2.8 - Creat ing a Successful Freelance Gam e Developm ent Business Se ct ion - Ta k in g a Ga m e t o M a r k e t Chapt er 3.0 - I nt roduct ion Chapt er 3.1 - Public Relat ions: Making t he Most of t he Gam ing Press Chapt er 3.2 - Securing a Developm ent Cont ract : The Art of Pit ching Chapt er 3.3 - The Whys and Wherefores of Gam e Agent s Chapt er 3.4 - Effect ive Developm ent Cont ract s Chapt er 3.5 - Pros and Cons of Worldwide and Count ry- by- Count ry Deals Chapt er 3.6 - Techniques t o I ncrease Upsell for Online Gam es Se ct ion - M a n a gin g Ga m e D e ve lopm e n t Chapt er 4.0 - I nt roduct ion Chapt er 4.1 - The St ages of Gam e Developm ent Chapt er 4.2 - Managing t he Developm ent Process Chapt er 4.3 - Cust om er Support in Massively Mult iplayer Online Gam es Chapt er 4.4 - Offshore Gam e Developm ent Out sourcing Chapt er 4.5 - Localizat ions Chapt er 4.6 - Leadership: The Making of Effect ive and Happy Team s Chapt er 4.7 - Qualit y Assurance: Bug Tracking and Test Cases I ndex List of Figures List of Tables List of Case St udies List of Sidebars Ba ck Cove r As t he gam e indust ry cont inues t o grow, you m ight be considering j um ping in, but before you do, read what t he insiders have t o say and learn from t heir experiences You'll explore t he inner workings of t he gam e developm ent and publishing indust ry t hrough t he experiences and insight s of indust ry expert s These publishing execut ives, developers, vet eran producers, designers, owners of independent st udios, and academ ics have writ t en a unique collect ion of art icles t hat really delve int o t he int ricacies of t he business The art icles, case st udies, and int erviews cover all aspect s of t he indust ry, providing real- world exam ples t hat illust rat e how successful com panies and individuals have achieved t heir goals Everyt hing is covered, from how t he ret ail m arket works t o financing a st art - up and deciding on t he right business m odel for your gam e Abou t t h e Edit or Franỗois Dom inic Laram ộe ( Verdun, QC) has designed, program m ed, and/ or produced over 20 gam es for con- soles, personal com put ers, int eract ive t elevision, and online net works over t he last decade He is a prolific writ er and t he holder of graduat e degrees in com put er science and business adm inist rat ion He is also t he edit or of Gam e Design Perspect ives and he has cont ribut ed t o t he Gam e Program m ing Gem s and AI Gam e Program m ing Wisdom series Secrets of the Game Business EDITED BY FRANÇOIS DOMINIC LARAMÉE CHARLES RIVER MEDIA, INC Hingham , Massachusetts Copyright © 2003 by CHARLES RIVER MEDIA, INC All rights reserved No part of this publication may be reproduced in any way, stored in a retrieval system of any type, or transmitted by any means or media, electronic or mechanical, including, but not limited to, photocopy, recording, or scanning, without prior permission in writing from the publisher Publisher: Jenifer Niles Production: Publishers' Design and Production Services, Inc Cover Design: The Printed Image 10 Downer Avenue Hingham, Massachusetts 02043 781-740-0400 781-740-8816 (FAX) www.charlesriver.com This book is printed on acid-free paper ISBN: 1-58450-282-7 All brand names and product names mentioned in this book are trademarks or service marks of their respective companies Any omission or misuse (of any kind) of service marks or trademarks should not be regarded as intent to infringe on the property of others The publisher recognizes and respects all marks used by companies, manufacturers, and developers as a means to distinguish their products Library of Congress Cataloging-in-Publication Data Laramộe, Franỗois Dominic Secrets of the game business / Franỗois Dominic Laramộe p cm ISBN 1-58450-282-7 Computer games—Programming Computer games—Marketing I Title QA76.76.C672L365 2003 794.8'1526—dc21 2002154755 Printed in the United States of America 03 First Edition CHARLES RIVER MEDIA titles are available for site license or bulk purchase by institutions, user groups, corporations, etc For additional information, please contact the Special Sales Department at 781-740-0400 Requests for replacement of a defective CD-ROM must be accompanied by the original disc, your mailing address, telephone number, date of purchase and purchase price Please state the nature of the problem, and send the information to CHARLES RIVER MEDIA, INC., 10 Downer Avenue, Hingham, Massachusetts 02043 CRM's sole obligation to the purchaser is to replace the disc, based on defective materials or faulty workmanship, but not on the operation or functionality of the product To my dad—I wish you would have lived to see this ACKNOWLEDGMENTS As always, many thanks to all the wonderful people who contributed to the creation of this book: the authors who wrote such wonderful articles, the dozens of industry insiders who agreed to share their wisdom in interviews and case studies, and, of course, the entire crew at Charles River Media, starting with David Pallai (who actually came up with the idea for this book and offered me the editor's job) and Jenifer Niles I am humbled by your talent and generosity Thanks to the readers who inspire me to continue writing these books and articles with their kind letters You have my undying gratitude And, of course, thanks to Julie for pushing me to something productive with my time! ABOUT THE AUTHORS Sean Timarco Baggaley Sean began his game industry career as an artist in the 1980s He designed and programmed several games in the 1990s, ported a popular PC soccer management sim to the Amiga long after the platform had been pronounced dead, and was responsible for naming the comp.games.* newsgroup hierarchy He recently wrote the user guide for RenderWare Graphics, a popular middleware solution, and currently works as a freelance writer and game design consultant Ed Bartlett Ed Bartlett is business development director for the legendary London-based independent developer The Bitmap Brothers At nearly 27 years of age, Ed is already less than three years from his 10 th anniversary in the industry With well over 10 published titles to his name on formats ranging from PC through console to handheld, he has intimate hands-on experience of QA, production, product acquisition, game design, and business management, all at the most senior levels Ed also works extensively with the IGDA and has a passion for writing, with numerous published features to his name Tom Buscaglia Tom is a principal in the law firm T.H Buscaglia and Associates in Miami, Florida He has been the chapter coordinator for the South Florida Chapter of the International Game Developers' Association since its inception several years ago, and is a moderator for the IGDA's Business and Legal Web forum He is also the president of BallroomGames, Inc., which holds the exclusive license for the use of the Arthur Murray Dance Studio name and materials in conjunction with developing a series of games based on the exciting world of ballroom dance Beverly Cambron Beverly Cambron is the founder of Rocco Media, LLC, a public relations and marketing firm Before entering the world of game industry public relations, Beverly was a litigation attorney in both Texas and California She received her degree in finance and international business from the University of Texas at Austin, and her law degree from Southern Methodist University in Dallas Beverly has contributed to several game industry books, magazines, and online publications, and is a published writer on the subject of wine Melanie Cambron Melanie Cambron is a recruiter for game industry leaders such as EA, THQ, Infogrames, and Sony Featured in several books for her industry knowledge, she is a popular guest speaker at universities and high schools on the game development business Melanie is frequently interviewed by major media such as the Dallas Morning News and serves as a consultant to the City of Austin's Interactive Industry Development Committee At E32002, she moderated the Will Wright and Yu Suzuki panel on game design secrets Her monthly "Interview with the Goddess," featuring industry celebrities, appears in GIGnews.com Chris Campbell Chris has worked as quality assurance lead on the Age of Empires game series He has also worked in the quality assurance field in several different sectors, including telecom, supply chain, and finance For fun, he runs a videogame trivia mailing list, and has been an avid gamer for more than 20 years Sande Chen A Grammy-nominated music video director, Sande Chen is an award-winning writer active in the gaming industry Her past credits include Terminus, Siege of Avalon, and Scooby Doo She has written for numerous publications, including the Boston Globe Thomas Djafari Thomas has been working in the game industry for over 12 years During this time, he has occupied various positions, has worked for major publishers, and has also completed independent projects He has been evaluating proposals made to publishers as well as seeking financial support for teams, earning knowledge from these two points of views Franỗois Dominic Laramộe A game development professional since 1991 and a full-time freelancer since 1998, Franỗois Dominic Laramộe has designed, produced, and programmed more than 20 games for half a dozen platforms In addition to this book, he edited Charles River Media's Game Design Perspectives and has written more than 50 articles and book chapters for and about game developers He holds graduate degrees in management and computer science, teaches graphics programming and other computer science topics at Concordia University, and moonlights as a comedy writer Philippe Larrue Philippe Larrue is a research fellow at INSEAD to William Lazonick and Mary O'Sullivan He completed a Ph.D in economics from Bordeaux University in May 2000 His thesis focused on the coordination of research and innovation activities in the early years of an industry He particularly examined precompetitive research consortia to assess the extent to which and under which conditions these can be efficient vehicles for collection action during this early stage This research was applied to the case of advanced batteries for electric and hybrid vehicles While still devoting some time to these issues, he is now working at INSEAD on a crossnational comparative analysis of the institutional infrastructures supporting the funding of startups in France and the UK This project is carried on through the case of the videogames industry William Lazonick William Lazonick holds a joint appointment as distinguished research professor at INSEAD and university professor at the University of Massachusetts Lowell He is also Professor-II at the Norwegian School of Management BI, where he teaches a doctoral course on innovative enterprise Previously, he was assistant and associate professor of economics at Harvard University (1975–1984), and professor of economics at Barnard College of Columbia University (1985–1993) He specializes in the study of industrial development and international competition Many of his published papers can be accessed at http://faculty.insead.edu/lazonick/ Heather Maxwell Heather Maxwell has been working in the games industry since 1996 She has worked at Activision, Electronic Arts, and Red Storm Entertainment in a variety of production roles She has a BA from Vanderbilt University and an MA from the USC School of Cinema-Television Mason McCuskey Mason is the leader of Spin Studios (www.spin-studios.com), an independent game studio currently hard at work on a brand new game Mason has been programming games since the days of the Apple II, and has run his own game development business for several years Mitzi McGilvray Mitzi McGilvray has spent the last 15 years in the interactive entertainment business She has worked with such premiere game publishers as Midway, Electronics Arts, Activision, Maxis, and Time Warner Interactive Her production credits include NCAA Football, Michelle Kwan Figure Skating, Figure Skating, March Madness, NHL 97, Wayne Gretzky Hockey, and various ports of SimCity and SimEarth Prior to founding Slam Dunk Productions, Mitzi was most recently a senior producer at EA.COM, where she was responsible for building budgets and business plans for mass-market online games, project management, game integration, and leading production teams Mary O'Sullivan Mary O'Sullivan is an associate professor of strategy and management at INSEAD She completed her undergraduate degree in 1988 at University College Dublin After two years as a business analyst at McKinsey & Co in London, she went to Harvard Business School and completed her MBA there in 1992 She then joined the Ph.D program in business economics at Harvard University Having completed that degree in June 1996, she spent six months as a visiting scholar at the University of Tokyo Her broad research interests include political economy, the history of economic thought, and economic history Oxford University Press has just published her book Contests for Corporate Control: Corporate Governance in the United States & Germany O'Sullivan developed the elective course on "Innovation, Strategy, and Corporate Governance" at INSEAD since 1997 She has been twice awarded the prize for the Best MBA Elective Teacher at INSEAD Javier Otaegui Javier F Otaegui is project leader of Sabarasa Entertainment, an Argentine game development outsourcing studio based in Buenos Aires He has been creating games since 1996, when he started Malvinas 2032, a local success Nowadays, he is leading outsourced projects for American and European customers Javier can be contacted via e-mail at Terri Perkins Terri Perkins ventured into the online game world with Lambda Moo and a 1200- baud modem while completing a bachelor's degree in education in 1994 She has administered and worked with volunteer programs for the Realms of Despair MUD, Everquest, and DragonRealms before finding her home as founder and director for Funcom Inc.'s Anarchy-Online volunteer program She has assisted in public relations, customer service design, project coordination, and consulting for various game organizations and companies She presently works in IT for Information International Associates and devotes spare time to combating Internet illiteracy and studying cyberculture Borut Pfeifer An avid gamer since the second grade, Borut Pfeifer co-founded White Knuckle Games, with his partners Dedrick Duckett and Doug Hayes in May 2001 His responsibilities at White Knuckle Games include serving as lead designer and AI and gameplay programmer They are currently working on a third-person cyberpunk noir action role-playing game entitled Reality's Edge Borut can be reached at Jay Powell Jay Powell received his BA from the University of North Carolina at Chapel Hill He has arranged numerous deals across the globe for PC, GameCube, PlayStation 2, and Xbox games Jay regularly provides advice for the development community through GIGnews and has lectured twice at the Game Developer Conference Jay also contributed two articles to the Charles River Media book Game Design Perspectives With almost two decades of gaming experience, Jay's industry insight has allowed Octagon to create and maintain a property evaluation and acceptance methodology that exceeds the standards and expectations of the interactive industry Kathy Schoback As director of external publishing and development at Sega, Kathy Schoback oversees relationships with Sega's external North American developers and publishing partners She has served in various roles in her tenure at Sega, including head of Dream-cast third-party publisher management, regional sales, and consumer service Kathy has also worked on the Game Developers Conference as part of the management team, and is currently a board member of the International Game Developers Association Michael Sellers Michael Sellers is the founder of Online Alchemy, a game development studio in Austin, Texas He has cofounded two other companies, Archetype Interactive in 1994, where he led the design for Meridian 59, and The Big Network in 1997, where he led the development of several online games and the ground-breaking MyPlace community software Following that, he spent three years as a senior designer for Electronic Arts, leading such efforts as SimCity Online, The Sims 2, and the next Ultima Online, and contributing to the The Sims Online Sellers has a degree in cognitive science Tom Sloper Tom's game business career began at Western Technologies, where he designed LCD games and the Vectrex games Spike and Bedlam There followed stints at Sega Enterprises (game designer), Rudell Design (toy designer), Atari Corporation (director of product development), and Activision (producer, senior producer, executive producer, creative director) In his 12 years at Activision, he produced 36 unique game titles (plus innumerable ports and localizations), and won five awards He worked for several months in Activision's Japan operation, in Tokyo, and is perhaps best known for designing, managing, and producing Activision's Shanghai line Tom is currently consulting, writing, speaking, and developing original games He can be contacted at Grant Stanton Grant Stanton is executive vice president of TSC and a professional recruiter in the games industry He has recruited development staff and executives in the games industry for over 12 years and has consulted with numerous game company startups offering strategies for staffing He is a second-generation recruiter in the industry, his father having helped staff companies such as Midway, Taito, Atari, and Collecovision in the early 1970s He can be reached via e-mail at Johanna Wilson Johanna Wilson is the CEO and a founder of OpenPath Products She has over a decade of IT experience and has spent the past five years managing and growing wireless Internet technologies within wireless carriers and enterprises OpenPath Products develops standards-based wireless software tools for creating and testing wireless applications OpenPath Products uses these tools to create SMS, WAP, and J2ME wireless games Preface Franỗois Dominic Laramée Welcome to Secrets of the Game Business, a book that unveils the inner workings of the flashy but very serious game development and publishing industry If you are thinking about creating a new game development company, want your existing studio to prosper for a long time, or just want to understand how and why the business evolved to its current dynamics, you have come to the right place! This book gathers the wisdom of dozens of industry insiders, publishing executives, veteran producers, owners of independent studios, writers, and academics It is divided into four major topic areas: Section 1, Publishers And Developers: Section examines the work of publishers and retailers, explains how games get from their developers to the players, and shows how the industry's economics influence the ways we work and live Section 2, Game Development Startups: This section describes how to prepare for the creation of a new game development company and succeed in a difficult market Section 3, Taking a Game to Market: Section teaches developers how to approach publishers, maximize the odds of their games reaching store shelves, and negotiate contracts that protect their longterm interests Section 4, Managing Game Development: This section contains advice on ways to make the long, arduous production process as smooth and pleasant as possible for everyone involved However, before we get to the heart of the matter, let's pause and take a look at the state of our industry as of late 2002 An Entertainment Powerhouse? Sales figures for the game industry as a whole are staggering, and getting more so every year—impressive, but misleading True, game software sales have exceeded Hollywood's box office receipts in North America since the late 1990s However, the fact that the price of a game is to 10 times higher than that of a movie ticket accounts for much of this mind-boggling "profit"—and once the home video market is taken into consideration, game sales suddenly don't seem so impressive Still, it seems that demographic changes are transforming interactive entertainment into a mass-market experience As game players (and developers) get older, we can expect new genres and game topics to emerge to satisfy the increased demand Sustained Growth According to an Informa Media Group report quoted in [Reuters02], the videogame industry's global sales for 2002 are expected to exceed $31 billion, a 12% increase over the previous year Almost 70% of this impressive number, or $22 billion, comes from sales of consoles and other hardware, while software accounts for the remaining $9 billion Although this means that software sales are expected to remain similar to 2001's figure of $9.4 billion [Gamasutra02], we must keep in mind that 2001 broke all records, besting the industry's previous banner year (1999) by almost 35% An Excess of Product Because of the very large number of games battling for a share of the players' attention, each title can only expect to receive a minute fraction of this lofty number While Hollywood releases approximately 100 movies to theaters every year, some of them in very limited distribution, the game industry launches thousands of titles on multiple incompatible platforms Consequently, a game that sells a few hundred thousand units is considered a moderate hit, while a movie that fails to draw at least 10 million viewers to theaters is perceived as a commercial failure Sure, movie production budgets dwarf ours, and it takes many more $5 tickets to pay for a $100 million film than it takes $50 boxes to make a $3 million game profitable However, in the end, while most movies end up being profitable (Hollywood accounting practices notwithstanding), the vast majority of games lose money for their developers, their publishers, or both Difficult Consolidation Thus, while the industry as a whole keeps growing, many of the individual companies that make and sell games are struggling to survive The stock market crash that followed the bursting of the dot-com bubble and the terrorist attacks of 2001 severely hurt many game publishers; for example, Interplay (de-listed by NASDAQ when its market capitalization fell below a minimum threshold), and especially the French companies that had pursued an aggressive policy of acquisition financed by stock swaps Moreover, with high-profile games requiring development budgets that grow by leaps and bounds (to $3 million on average, more on some consoles), small and mid-sized publishers find it increasingly difficult to compete in the global marketplace It is likely that fewer than 20 global companies will survive the next five years; the rest of the publishing landscape will be dotted with much smaller players concentrating on specific nations and territories Can Startups Still Thrive? With fewer large publishers competing for their products, game developers will need to work harder to find a channel to market—and to approach alternate sources of funding for their projects Taking a game to market, which wasn't easy in the past, will become more difficult in the future However, this business is still built on talent We must remember that many of the most successful games in recent history—for example, Half-Life, Asheron's Call, and Age of Empires—were developed by startups or relatively young companies, not all of which were populated by industry veterans Runaway hits can still, once in a while, be created by a small resourceful team working on a shoestring (Deer Hunter), or even by a single individual with very little help (e.g., Roller Coaster Tycoon and Tetris) Breaking into games can be difficult, especially if you dream of making a console blockbuster right out of college, but it is by no means impossible Index S sales of games See also online business models Aggregator Sales model general discussion, 131, 132, 136 Java Micro Edition (J2ME), 143 RealOne Arcade, 153–154 Wireless Application Protocol (WAP), 140 Carrier Sales model, 131, 132, 143 combined models, 153–157 Direct Sales model application of, 147–148, 151–152 general discussion, 131–132, 136–137, 145–146 Java 2Micro Edition (J2ME), 143 Wireless Application protocol (WAP), 139–140 retail entities, role of, 28–32, 36–38, 48, 145–147 sales strategies, 235–236 statistics, retail, 36 traditional retail models, 145–147 unique selling points (USPs), 189, 190 virtual communities, 149–152 Web & retail sales, 3, 147–148 sales pitch misconceptions of, 10–11 pitching defined, 185 preparation, 187–189 presentation, 193–194, 196–201 schedule and budget, 191–192 types of deals, 186–187 sales strategies, 235–236 Samu Games, 150–151 San, Jez, 70 Sapet, Christian, 68 Sarbakan, 40 schedules, 10, 168–169 Schoback, Kathy, 3, 15–32 Schreiner, Ole, 273 SCi, 70–71, 72, 73, 74, 75 SCORE (Service Corps of Retired Executives), 123 Second Marché, 68, 69 Sega, 20, 69 Sega Dreamcast, 27 Sellers, Michael, 243, 245–258 sequels to games, 53 service aggregators, 136, 140, 143 See also Aggregator Sales model Service Corps of Retired Executives (SCORE), 123 Shanghai Second Dynasty, 264, 268 shelf keeping units (SKU), 190 Shiflett, James, 148 shipping of finished game, 21 Short Message Service Centers (SMSC), 133 Short Message Service (SMS), 131, 132–136 Siege of Avalon, 148 Silicon Graphics, 24 Silicon Graphics OpenGL API, 25 Simis, 69 Simutronics, 276 Sinister Games, 71 Sloper, Thomas, 117, 243, 261–270 Small Business Administration (SBA), 121, 122 Small Business Development Center (SBDC), 122 Sony, 69 Sony Playstation 2, 18, 20, 26, 191 Splinter Design, 72 spoofing, 237 Square USA, 66 staffing issues creating job descriptions, 107–109 finding, 109–110 interviewing, 113–115 screening, 110–112 skills verification, 112–113 Stainless Software, 72 Stanton, Grant, 107–116 statements financial statements, pro forma, 101–103 profits and losses statements, 43, 121 statistics, retail, 36 SteppenWolf, 40 stock markets, role of, 74–75 Strategy First, 45, 50–51 strategy guides, 266 Striker, 70 success, defined, Surfas, Mark, 156, 157 Index T Take Interactive, 66 Tams11 Gaming Lobby, 151–152 Target, 30 tax and finance responsibilities, 21 team leader producer personality type, 60 technical design documents, 251 technical directors, role of, 57 technical support See also employees; volunteers monitoring, 281–282 planning, 51, 273–275 policies, 275 staffing options, 275–278 staff size, calculating, 278–279 turnover, 279–281 technical team, role of, 253, 254, 264 technologies, proprietary, 21 test and integration plan, 252 test bed, 22 testing, games contract testing, 22 functionality testing, 303–304 localizations, 303–304 playtesting, 21 regression testing, 323 test and integration plan, 252 test bed, 22 texture memory, limited, 19 THE, 20, 66 The First Quarter: A 25-Year History of Video games (Cent), 66 Themes Group, 276 third-party games, 24 third-party license, 187 Tiptoes Interactive, 65, 67, 69, 71, 73, 75 TLC, 71 Tomb Raider, 67, 70 Toyota Adrenaline, 155 Toys-R Us, 30 tracking bugs, 286, 317–324 trademarks, 21, 26 trade shows, 266 TRSTS data, 32 Tvedt, Ørhan Mathis, 280 Twentieth Century Fox, 263 types of products, 187 Index U Ubi Soft, 66, 67, 69, 71, 73, 75 Ulrich, Philippe, 68 Ultima Online, 276, 277, 278 uninstallation routines, 323 unique selling points (USPs), 189, 190 United Kingdom Department of Media, Culture, and Art, 65, 75 Unlisted Stock Market (USM), 70 U.S Labor Law, 276 USA Today, 23 user interfaces, localizing, 298 US Gold, 70 Index V Vallerand, Richard, 40 valuation methods, 120–122 Valve Software, 17–18 venture capital, 17, 101, 128–129 viral marketing, 87–89 Virgin Interactive, 69, 71 Vivendi Universal Publishing (VUP), 66, 67 volunteers, role of, 276, 277–278, 279–281 See also customer service; employees Index W Wal-Mart, 30, 31 Warner Brothers Online, 40 warranties, 213 Warthog, 73 Wayward Design, 72 Web site design, 233–234 white space advertising, 31 WildTangent, 24 Wilson, Johanna, 131–144 Wireless Application Protocol (WAP), 131, 137–140 WirelessDeveloper, 142 word-of-mouth marketing, 87–89 400 Word Rule, 177 work for hire contracts, 186 world-wide model of publishing, 221, 223–228 Wright, Andrew, 154 Index Y Yahoo!, 150 Index Z Zone.com, 154–156 Zreality, 276 List of Figures Chapter 1.2: The Role of Each Entity in Game Publishing Figure 1.2.1: Position of each entity in the product path for a console game Chapter 1.5: The Producer, Friend or Foe? Figure 1.5.1a: Percentage of male and female producers Figure 1.5.1b: Producer compensation Figure 1.5.2: Production hierarchy Figure 1.5.3: A producer's day Chapter 2.6: Wireless Business Models Figure 2.6.1: Sales models Figure 2.6.2: SMS connectivity options Figure 2.6.3: WAP connectivity options Figure 2.6.4: J2ME connectivity options Chapter 2.7: Online Business Models: Using the Net for Profit Figure 2.7.1: In the traditional retail model, the publisher owns and controls the rights to the game The developer supplies the game to the publisher, who then negotiates with distributors and retailers to reach the customer Figure 2.7.2: CogniToy's self-published game, Mind Rover, was sold direct-to-customer via its Web site and through intermediaries EBWorld, like its parent company, sells on consignment Figure 2.7.3: Digital's Tome game, Siege of Avalon, was sold to consumers through a subscription or a la carte Digital Tome paid Digital River, a third-party transaction company, a percentage of the sales Figure 2.7.4: Samu Games' self-published game, Artifact, is free to play, but access time is sold direct-tocustomer via the Web site The company relies on referrals and low-cost word-of-mouth advertising from its virtual community to increase its subscription rate Figure 2.7.5: RealOne Arcade aggregates games from publishers and independent developers Advertisers are eager to reach consumers of the high profile site Figure 2.7.6: Zone.com aggregates games from different publishers for retail matchmaking Advertisers promote products to consumers through sponsored games Figure 2.7.7: GameSpy business model Chapter 2.8: Creating a Successful Freelance Game Development Business Figure 2.8.1: Sample schedule Chapter 4.1: The Stages of Game Development Figure 4.1.1: The stages of game development and the approximate duration of each Figure 4.1.2: The process of convergent iteration shown over the stages of game development Note that the upward strokes are define—design—implement, while the downward strokes are evaluation phases The number of phases shown will vary by project, and is not meant to be taken literally Figure 4.1.3: In some cases you might find that your project is not converging on a single game This can happen if you did not start with a clear concept, or if external requirements change throughout the life of the project Figure 4.1.4: If you race into production too quickly, you might find your project wandering through the conceptual space in the late (and expensive) stages Chapter 4.7: Quality Assurance: Bug Tracking and Test Cases Figure 4.7.1: New bugs found each month in each game development area Figure 4.7.2: Open bugs at the end of each month by developer List of Tables Chapter 1.2: The Role of Each Entity in Game Publishing Table 1.2.1: Generalized Breakdown of Revenue from a $50 Console Game Chapter 1.6: The European Challenge in Videogame Software: The "French Touch" and the "Britsoft Paradox" Table 1.6.1: Top 15 Independent Videogame Publishers of 2001 Information adapted from the Financial Report 2000/2001 of UbiSoft Table 1.6.2: Revenues, Net Profits, and Employees of Leading French and British Videogame Companies, in millions Information adapted from Thomson Analytics database [Thomson] Table 1.6.3: Cash Raised Through Share Issues and Long-Term Debt Issues by Leading French and British Videogame Companies, in €millions Information adapted from Thomson Analytics database [Thomson] Chapter 2.2: Writing a Business Plan for a Game Development Startup Table 2.2.1: Simple Cash Flow Statement (Simple Studios Inc.) Table 2.2.2: Simple Earnings Statement (Simple Studios Inc.) Chapter 4.3: Customer Support in Massively Multiplayer Online Games Table 4.3.1: Customer Service Models Chapter 4.5: Localizations Table 4.5.1: Asset Overview Form Table 4.5.2: Estimate for Development Costs Table 4.5.3: Spreadsheet for Text Translation Table 4.5.4: Spreadsheet for Audio Translation Table 4.5.5: Linguistic Bug Report Template List of Case Studies Chapter 1.3: How Developers Get Paid: The Retail Market for Games Case Study 1.3.1: Self-Publishing Case Study 1.3.2: Royalties versus Guarantees Chapter 1.4: A Publishing Project: From Concept to Launch and Beyond Case Study 1.4.1: Estimating a Project's Profitability Case Study 1.4.2: How a Publisher Selects a Team for Contract Development Case Study 1.4.3: Self-Publishing (Continued) Case Study 1.4.4: A Publisher Profile Chapter 2.1: Development Misery and How to Avoid It Case Study 2.1.1: A Brief History of MS-DOS Chapter 2.2: Writing a Business Plan for a Game Development Startup Case Study 2.2.1: Modulating the Business Plan Case Study 2.2.2: Creative Risk Management Case Study 2.2.3: Minimizing the Cost of Money Chapter 2.6: Wireless Business Models Case Study 2.6.1: Pinpoint Networks Inc Case Study 2.6.2: Pixo Case Study 2.6.3: WirelessDeveloper Chapter 2.8: Creating a Successful Freelance Game Development Business Case Study 2.8.1: Financial Planning Case Study 2.8.2: Mark Barrett, Prairie Arts Chapter 3.1: Public Relations: Making the Most of the Gaming Press Case Study 3.1.1: Game Reviewer Perks and Playola Case Study 3.1.2: A Sample Press Release Chapter 3.2: Securing a Development Contract: The Art of Pitching Case Study 3.2.1: Team 17 Case Study 3.2.2: Acclaim Chapter 3.5: Pros and Cons of Worldwide and Country-by-Country Deals Case Study 3.5.1: Evaluating Intellectual Property Case Study 3.5.2: What to Include in a Package to a Worldwide Publisher Case Study 3.6.3: What to Include in a Package to a Country-by Country Publisher Chapter 4.3: Customer Support in Massively Multiplayer Online Games Case Study 4.3.1: Planning Customer Service Case Study 4.3.2: Customer Service Policies Case Study 4.3.3: Volunteers, Games, and the Law Case Study 4.3.4: Comparison of Games and Support Models Case Study 4.3.5: Staffing a Volunteer Program Case Study 4.3.6: Rewarding Customer Service Staff Chapter 4.4: Offshore Game Development Outsourcing Case Study 4.4.1: The Provider's Side Case Study 4.4.2: The Client's Side Chapter 4.6: Leadership: The Making of Effective and Happy Teams Case Study 4.6.1: Real-life Team Leader Tales of and Tips for Success Chapter 4.7: Quality Assurance: Bug Tracking and Test Cases Case Study 4.7.1: How to Report Bugs List of Sidebars Preface Emerging Game Development Communities Freedom of Expression ... on the other phone line, explaining this year's business plan to the local game journalist The publisher gives the PR firm complete access to its game' s development, while the PR firm coaches the. .. models for specific segments of the game development community, the industry as a whole remains bound to the retail market, and will stay bound to it for the foreseeable future However, the way the. .. market without proving their worth in the PC world first The bottom line: the vast majority of game projects lose money for the developer, the publisher, or both Therefore, the industry must rely