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 Features
What's Wrong with the Games Industry (And How to Make It Right)
 Goals
Unlike the development company which puts its finger in about a dozen pies, the production company has but one goal: Make one profitable game at a time. They do this by avoiding the death-traps of franchises, product lines, technologies, etcetera. Those are goals for other companies.
The production company makes the game that they have pitched and demonstrated work. They do this by charging the right price, and exercising their flexibility. They have the flexibility to walk away from sour deals, avoiding the trap of under-bidding, and removing contract clauses that they are not comfortable with. A production company is able to say no without staring immediate bankruptcy in the face. How many developers are in that position?
The production company’s goal is always to make the game they are currently working on profitable. Get the right people in, do a good job, don't get locked into bad payment rates or the illusion of royalty schemes that will never yield a dime. Better to do one thing well than a dozen things badly.
Focus
Single-minded goals provide a long term strategy for the game production company. It's a simple strategy, and it has the advantage therefore of actually working.
While a lot of people are currently trying to talk big about leveraging value chains, about ownership schemes where the project is split into various ownership companies for investment, and many other vague measures, the company with the focused, simple strategy is the one that usually prevails. No publisher wants to do business with a developer that wants ownership, and a game production company doesn't bother with trying to get blood from that stone. They offer the whole package, IP rights and all, to the publisher because their goal is one profitable game at a time.
This sounds like they are willfully missing the big trick, but that is an incorrect analysis. Most developers are never in the position where they can make their franchise hopes and dreams a reality because they have no leverage to make that happen. Publishers want IP. IP is their primary business.
For a developer to focus on IP is therefore an exercise in loss of focus. It is analogous to an advertising agency wanting to negotiate royalty rates off the back of an ad’s success. No corporation wants to do business with an ad agency that seems intent on cutting into their core business, and the same is true for game publishers. A few developers that have the resources and reputation from the good old days might be pandered to in exchange for their celebrity, but this does not mean that the way is open for most to follow.
So a production company simply doesn’t bother with any of this. Instead, it adopts a smart negotiating strategy. By being focused on one clear goal, the production company knows that its business is not with the public. It’s with the industry. Its tiny infrastructure is designed to work within the industry, and therefore its payment structure is designed likewise. Production companies look for a full paycheck and leave the royalties and rights to businesses that know what to do with them.
People
None of this works without the right people and finding good people is hard. However, the internet is proving to be a useful meeting place. Industry forums and contacts services like LinkedIn are putting people together, helping air some grievances out of the public spotlight and educating individuals in a better way of working. Individual developers are talking like never before and slowly realising their true worth. It is only a matter of time before these people start to organise a new industry based on solid reputations as professionals, hopefully sweeping away the old order in the process.
As with all industry changes, it will happen slowly and then suddenly. The business climate is going to be much more professional, much less ego driven, and much more coordinated to work on a world-wide basis. This is primarily going to be driven by game production companies becoming the root and branch of the industry rather than the sick man developer whose time is clearly up.
Welcome to the games industry, version 2.0.
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