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Are Video Game Publishers Becoming Irrelevant?
by Bryan Cashman on 05/13/14 09:15:00 pm   Featured Blogs

The following blog post, unless otherwise noted, was written by a member of Gamasutra’s community.
The thoughts and opinions expressed are those of the writer and not Gamasutra or its parent company.

 

In a digital world, game developers can excel without being under the corporate umbrella of a large game publisher. Game developers owned by game publishers used to have an endless list of advantages: Strong marketing support, extensive financing, a strong front and back-office staff, and a brand that gamers recognized. In today’s market, where games are delivered and discovered digitally, developers are increasingly succeeding without the ownership of a publisher, or an exclusive relationship. Today, the benefits of existing under a publisher’s umbrella have never been smaller.

The New Found Freedom of Video Game Developers

It’s telling that two of the most important titles of 2014 are by developers not owned by game publishers. Both Respawn Entertainment’s Titanfall and Bungie Studio’s Destiny are made by industry icons that broke free of a publisher’s ownership.

Titanfall by Respawn Entertainment

Titanfall by Respawn Entertainment

Titanfall is 2014’s strongest new AAA IP, yet it was developed by a studio founded only four years ago and operates independent of a game publisher. Started by the creators of the Call of Duty series, the company entered an independent publishing arrangement with EA, and gained exclusive marketing support from Microsoft. The company took their expertise in online games to build their own company and create their own IP, without joining the payroll of a large game publisher.

Destiny by Bungie Studios Destiny by Bungie Studios

The next big IP launch of 2014 will be the cross-platform Destiny, another online shooter developed by veterans. The game’s developer, Bungie Studios, left Microsoft after seven years of ownership by the publisher, and entered into a ten-year independent publishing agreement with Activision-Blizzard, while retaining its own ownership of the company. Rather than seek ownership of established video game publishers, both studios preserved their independence and IP by instead forming distribution relationships with publishers.

Brands are Bypassing Video Game Publishers

With game distribution easier than ever thanks to app stores and digital console marketplaces, famous IP owners are starting to examine releasing games on their own, without partnering with a game publisher. Major League Baseball is releasing its own baseball game this year, without the help of a game publisher. Sports games are traditionally developed and published by large video game publishers like Electronic Arts and Take-Two Interactive, but MLB Advanced Media decided to build a game on their own terms, and release it themselves through digital marketplaces. If successful, IP holders may consider funding their own inexpensive download-only games, in addition or replacement of licensing IP to game publishers.

What Can a Publisher Offer a Developer?

In the past, publishers provided significant added value to development studios, but the mutually beneficial relationship is at risk. The advent of digital distribution, and the combination of quality outsourcing, freelance and consulting firms has significantly decreased the value-add of game publishers. Just as some musical acts no longer need a major record label for success, video game developers can now succeed commercially without a publisher. Many of the value-add services provided by publishers in prior console generations are now less relevant to developers. Developers can now use outsourcing firms for tasks not core to their game development duties, and can leverage their own content expertise to conduct social marketing in a way a corporate office at a video game publisher could not. By being close to the content itself, studios can tweet asset images, developer quotes and share YouTube video clips faster than a publisher’s corporate workflow. The benefits of working with a major video game publisher are decreasing in a digital world.

Advantage of working for a video game publisher in the old world Reality of video game publisher service in a digital world
Traditional PR Disrupted by social media (blogs, YouTube, Twitter, etc) executed directly by the developer
Sound Design Easy to outsource
Testing Easy to outsource
Payment processing Easy to outsource
Shelf Space at Retailers Irrelevant for digital distribution
Social Media Often more successful when a developer is speaking to the community, not a publisher
Big media advertising VC-funded advertising campaigns as needed

Video game publishers still provide many benefits to developers, such as financing, IP and technology expertise, but to compete in a digital world, they will have to improve their library of services for developers.

The Industry is Changing

The shift away from publishers shouldn’t be a surprise, given how quickly the industry adopted a digital value chain. 2013 saw more game revenue from digital content sales than from physical game sales, and the trend will only grow further in the future. Developers need publishers less if they can sell and market the game themselves on digital platforms. Developers that used to have to partner with an Electronic Arts to sell in Walmart and Toys R Us can now sell and market a game directly on Apple, Amazon or Google’s storefront with no publisher middle-man.

Adapt or Become Extinct

As game developers increase their independence, what can publishers do to continue to stay relevant to the development community? Should they focus on acquiring killer IP that developers can enhance with great games, should they lower the cut they take from game sales, or should they build integrated online infrastructures to help games get online and recognized by gamers. We want to talk with you about this, and leave your thoughts below or on Twitter.

Stay in touch! The author, Bryan Cashman ( @consulgamer ), blogs about business issues in the video game industry at CONSULGAMER. This article represents Bryan's personal opinion only.


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Comments


Christian Nutt
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Interesting, but... Do you really think a game like Destiny could exist without Activision? Funding, marketing, and probably support functions.

I think that it'll be possible, potentially, in the future for something like this to happen -- but not now. I mean, with the performance of something like Warframe, it's more realistic a possibility than I think some might believe, but there's still quite a distance between Warframe and Destiny.

Bryan Cashman
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The biggest of the biggest games may always need publishers, but there are more games out there than the biggest of the biggest games. Yes, some packaged games will need the investment and support that only a publisher can provide, but the number of studios that can live without a publisher are accelerating.

This also parallels the music industry - twenty years ago music labels offered artists marketing support and CD packaging & distribution services. The need for those services dried up with social media and digital distributions - but labels adapted to offer merchandise and touring services. Game publishers will have to find similar new service offerings to stay relevant to most game developers.

And last on Destiny - it's pretty shocking that Activision's next big "pillar" is with a game studio they don't own. It says a lot about the power developers have today when compared to publishers.

Guillermo Aguilera
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What Can a Publisher Offer a Developer?
Money

Greg Scheel
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And, that's about it, usually at the cost of control.

Bryan Cashman
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And given they're only funding AAA games and a select-few proven indie games, it can open up the market to other funding mechanisms (venture capital, Early Access, KS, etc).

Laura Bularca
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My take on this topic is closely related to another fresh article about Steam (http://www.gamasutra.com/view/news/217583/How_the_surge_of_Steam_
releases_will_affect_game_developers.php)

So yes, it is easy to self publish, but it is also clear that many developers lack some skills that the publishers are good at, such as marketing. I do not think its just a question of money as in a marketing budget.

The fact is, the industry IS changing and has been changing for some time. Now it just changed enough to make the big headlines. But I believe the change is, that publishers and developers now have a more symbiotic relationship, or rather, that publishing is a service one should be able to buy, just like you can buy testing services. Or - in the most extreme case - that publishers are now serving developers, not the other way around as it has been for so long.

But how about the money? I really cannot figure what publishers are interested in now. Do they want to invest in the development of a game? Because historically they have been quite risk averse, so I would think maybe they would rather not invest, but just ride the wave and be the curators that platforms like Steam so desperately need (which can both be good due to the publishers experience, but also terribly bad due to past history). I have yet to clearly define in my head the quantifiable value a publisher can deliver to a game developer, but if a publisher could combine the experience with a great degree of openness, I can certainly see some great services coming out of it.

Bryan Cashman
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Laura, I really like your take here, and there are some great points here.

Publishers are not evil companies - they provide guidance, financing, marketing and also a silent role in curating content for mass audiences. But given alternative channels for these services today, developers may be able to pick and choose which of these services they get from publishers (which also means a lower cut to the publishers), and they can instead use specialist firms (ie app monetization consulting firms, social media experts) outside of a publisher's umbrella when it makes sense.

andreas grontved
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yes.

Michael Wenk
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Isn't MS doing a ton of marketing for Titanfall? I see it all over the place. I doubt the studio did it on their own, and I highly doubt the many places just decided to promote it on their own. Also, outside of Kickstarter is it really easy to get money from investors?

I think the rumors of publishers dying are pretty much false.

Bryan Cashman
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The great story of Titanfall is the developers do not have a publishing agreement with Microsoft. EA is the distribution publisher of the game, and by strategically releasing exclusively on Xbox for this year's game, they won over Microsoft's marketing support.

The lesson for development studios is that publishers are not the only potential partners who can provide mass marketing services. If they create a compelling enough experience and exclusively release their game on one platform, they may be able to get free mass-market advertising from a platform older.

Of course, not every game has the strength and scale of Titanfall, but as an outlier it's a good story of how big games from studios can succeed in the future.

Dave Long
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I'm not sure Titanfall is such a great example given that the developers were blindsided by the Microsoft exclusivity and weren't in favor of it. From what's been said, they expected a multi-console release and EA (the big publisher/distributor) cut a deal without consultation.

That's just the same old big pubilsher nonsense that studios don't want to participate in. So yeah, it's great that Respawn owns the content and controls how it all appears, but apparently what they didn't own was their own distribution agreement, which probably has resulted in a lot less dollars in total sales volume that they'll never see since EA cut the deal with Microsoft and reaped those rewards.

The bottom line is publishers are still holding many of the cards. It's just that the creators may retain the look and feel and direction of their worlds.


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